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HomeMy WebLinkAbout2017-04-27 Info PacketCITY COUNCIL INFORMATION PACKET CITY OF IOWA CITY www.icgov.org April 27, 2017 I131 Council Tentative Meeting Schedule MAY 2 WORK SESSION IP2 Work Session Agenda IP3 Letter from Assistant City Manager: Exploration of Sustainability and Carbon Reduction Projects IP4 Memorandum from Council Member Cole: Solar Capital Improvement Plan IP5 Pending Work Session Topics MISCELLANEOUS IP6 Memorandum from Assistant to the City Mgr: ICCSD Bond Referendum Ballot Language I137 Memorandum from Neighborhood Development Services: Downtown CoSign program IP8 Information from Finance Dir.: FY 2017 3`d Quarter Investment Report IP9 Information from Finance Dir.: Official Statement for 2017 General Obligation Bonds IP10 Information from Finance Dir.: Official Statement for 2017 Water $ Sewer Revenue Bonds IP11 Copy of Press Release: City of Iowa City earns Aaa bond rating: Credit Opinion form Moodys Investors: GO Bonds Credit Opinion form Moodys Investors: Sewer Enterprise Credit Opinion form Moody's Investors: Water Enterprise IP12 Copy of Article from City Mgr: Why is Affordable Housing So Expensive ? IP13 Flyer: Bike Month —May 2017 IP14 Joint Entities Meeting Minutes: April 17 Copy of email to Mayor from U.S. Conference of Mayors: Justice and ICE Narrow Compliance Definition of "Sanctuary City" to Mayors [Late addition distributed 5/1/17.] DRAFT MINUTES IP15 Community Police Review Board Community Forum —April 12 _L CITY OF IOWA CITY www.icgov.org CITY COUNCIL INFORMATION PACKET IPI Council Tentative Meeting Schedule April 27, 2017 I MAY 2 WORK SESSION I IP2 Work Session Agenda I133 Letter from Assis ant City Manager: Exploration of Projects IP4 Memorandum from C ncil Member Cole: Solar at 1135 Pending Work Session opics nability and Carbon Reduction Improvement Plan I136 Memorandum from Assistant to th City r: ICCSD Bond Referendum Ballot Language I37 Memorandum from Neighborhood De pment Services: Downtown CoSign program I38 Information from Finance Dir.: FY 20 3' Quarter Investment Report I39 Information from Finance Dir.: OM ial State ent for 2017 General Obligation Bonds IP10 Information from Finance Dir.: O ficial Stateme for 2017 Water & Sewer Revenue Bonds I311 Copy of Press Release: City Iowa City earns Aa bond rating: Credit Opinion form oodys Investors: GO onds Credit Opinion for Moodys Investors: Sew Enterprise Credit Opinion fo Moody's Investors: Wate Enterprise IP12 Copy of Article from City gr: Why is Affordable Housin So Expensive 7 IP13 Flyer: Bike Month— ay 2017 IP14 Joint Entities Mee ng Minutes: April 17 DRAFT MINUTES IP15 Community P1 lice Review Board Community Forum —April 12 r � CITY F IOWA CITY Date City Council Tentative Meeting Schedule IP1 Subject to change April 27, 2017 Time Meeting Location Tuesday, May 2, 2017 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, May 16, 2017 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Wednesday, May 24, 2017 5:00 PM Joint Meeting JC Brd of Supervisors TBD Work Session Tuesday, June 6, 2017 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, June 20, 2017 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Monday, July 17, 2017 4:00 PM Reception Johnson County 4:30 PM Joint Entities Meeting TBD Tuesday, July 18, 2017 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, August 1, 2017 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting Tuesday, August 15, 2017 5:00 PM Work Session Emma J. Harvat Hall 7:00 PM Formal Meeting I r CITY OF IOWA CITY 410 East Washington Street Iowa City, Iowa 52240-1826 (3 19) 356-5000 (319) 356-5009 FAX www.icgov.org City Council Work Session Agenda Tuesday, May 2, 2017 Emma J. Harvat Hall - City Hall 5:00 P.M. • ICPL Bookmobile tour Potential Sustainability/Carbon Emission Reduction Projects " [IP #3, IP #4 of 4/27 Info Packet] • Clarification of Agenda Items Information Packet Discussion [April 20, April 27] r _.p CITY OF IOWA CITY IP3 MEMORANDUM Date: April 13, 2017 To: Mayor and City Council From: Ashley Monroe, Assistant City Manager Re: Exploration of Sustainability and Carbon Reduction Projects Introduction: At the March 7, 2017 City Council meeting, Council directed staff to prepare a list of potential energy efficiency or renewable energy projects that will showcase the City's commitment to carbon emissions reduction. This memo provides an overview of the potential opportunities for a demonstration project or options for improvements to current City services and infrastructure as well as a summary of the forthcoming community partnership sustainability grant program. History/Background: As part of the City Council Strategic Plan goal to expand on sustainability and carbon emissions reduction efforts, many projects and programs have already been started. Examples of recent projects include the energy auditing and upgrade of over 90 publicly owned housing units through partnership with AmeriCorps and developing a community grant program for non-profit facility energy efficiency improvements. Through planned maintenance and replacement schedules, City buildings continue to receive heating, cooling, lighting and building controls improvements that increase energy and cost savings. Furthermore, as new projects come to light, staff looks for ways to incorporate efficient technologies or renewable energy installations. For example, an RFP including solar -lit bus shelters along the Towncrest and Lakeside bus routes is planned for release soon. The outlined projects may be scalable, based upon preference, available space, and cost. Although additional research or analysis may be needed to confirm the best approach to the selected project, see suggested options for new sustainability projects below: Potential Solutions Renewable Ener y Projects Install a large wind turbine or solar photovoltaic system o Mounting a large expanse of solar panels at the Wastewater Treatment Plant had been considered several years ago. As part of this finding, the amount of space (14 acres) would be required to power the south treatment facility. The expense, minimal ROI and encroachment on other facilities did not make this a feasible option at that time. If desired, the feasibility of a large-scale solar or wind installation could be reevaluated. Over time, some options for renewable installations have become smaller, more powerful and less costly. MidAmerican Energy is planning to eventually convert to 100% renewable energy generation. Therefore, to achieve the greatest ROI possible, the best location for a project like this would be on a property such as the Wastewater Treatment Facility or the Iowa City Landfill, which are not currently served by MidAmerican. Introduce small wind or solar installations o A better ROI may be possible for small wind or solar installations on parking ramps, park shelters or other public buildings. The current wind turbine at the Eastside Recycling Center generates limited power and is an excellent demonstration fixture. April 13, 2017 Page 2 It is possible that small installations could be fixed to various public structures at a height, location, and direction that will generate an efficient ROI. It should be noted that these types of projects offer high visibility but may provide lower ROI than a lighting or HVAC project. Fleet Opportunities Use an alternate fuel source for City fleet vehicles o City can explore electric vehicles (EV) for local use. The electric grid is becoming increasingly more "green" and EVs reduce carbon emissions. Integrating EVs into the fleet would entail tracking current vehicle mileage to assess which vehicles are most appropriate for replacement in favor of solar or electric grid charging vehicles. The City would also need to add charging stations in various locations and learn more about EV maintenance. The State of Iowa is currently reviewing and compiling specifications for adding electric vehicles as an option in their purchasing contract. Conversion of City vehicles to Compressed Natural Gas (CNG) would require an installation of fairly costly storage and fueling infrastructure. Additionally, the existing equipment shop would need to have proper ventilation and other requirements to safely operate. As we plan for the new Public Works facility, this option will be considered in design. Expand Big Belly solar recycling to parks o Bringing recycling to City parks with expansion of Big Belly containers would be a community -wide, visible commitment to both solar energy and waste minimization. This idea is noted in the "Fleet" section because of the significant reduction in pick- up frequency, therefore reducing carbon emissions and fuel costs. Recently, the Big Bellies moved to a subscription service, therefore all new containers would be rented and require continued budgeting for the foreseeable future. Facility and Community Improvements Continue standard energy efficiency upgrades of public buildings o Projects that provide substantial energy savings include building improvements such as LED and other high -efficiency lighting, digital and automated controls, efficient windows and building insulation. These types of projects offer low visibility but a high and faster ROI. If directed, it is possible to design and install wall plaques in places of interest within public buildings that describe the savings and efficiency measures of improvements that relate to the location, i.e. automated water faucets in restrooms or solar -lighting fixtures on a park shelter. Choose a corridor for a significant tree planting effort o Benefits of substantially increasing the tree cover along main roads would improve the area's walkability and improve aesthetic appeal of the neighborhood. A "heat island effect" would also be reduced by increasing the green cover and shade over paved areas. This effort would likely require contracting to help the City with additional planting. While this project may not significantly reduce greenhouse gas emissions, it would contribute to the livability of the corridor and have great visual impact. An example of this kind of project includes the recent landscape upgrade at the Sycamore and Lower Muscatine corridor. Finally, as directed by Council, a community partnership grant is nearing final development. The $25,000 grant program will offer partnered community groups an opportunity to initiate innovative projects supportive of the City's sustainability objectives. The application will further define program goals and be ready to post and promote by the end of June. Staff will present program details to Council for consideration prior to officially opening up the grant program. Financial Impact: The fiscal impact of the selected project will be based upon the scale and project selected. Projects such as the Big Belly expansion or a solar project would require annual budgeted line April 13, 2017 Page 3 items, where others, such as an electric vehicle fleet would be a significant capital expense and require maintenance. A feasibility study would be conducted for any selected project. The project is anticipated to be funded with $150K allocated in the FY 18 Capital Improvement Plan (CIP) for climate mitigation efforts. Any remaining funds will be reserved for recommendations made through the Climate Action Plan report. �I To: Council From: Rockne Cole Re: Solar Capital Improvement Plan Date: April 27, 2017 I am writing this memo as a follow up to Mayor Throgmorton's recent proposal for a possible solar installation on one municipal building, and also in response to staff's request for more direction relating to achieving our environmental goals. In the past, we have seemed reluctant to embrace solar, primarily, because we did not have a concrete estimate as to what it would likely cost. This memo seeks authority from council to authorize staff to issue a request for proposal to get a cost estimate on five municipal buildings that staff feels are most readily adaptable to solar installation. After we get that estimate, we can then decide whether we wish to proceed forward as part of our regular capital improvement budgeting process. Consequently, I am asking for authority to do the following: A. authorize staff to do a request for proposal on the five municipal buildings that staff feels are most adaptable to solar installation (either ground or roof top); B. upon receiving the initial cost estimate, we could then set a goal of at least two solar installations each year, beginning with buildings with the lowest cost installations on the list. The request for proposal will require some staff time, but will not require any significant cost to obtain the estimate, and does not commit us to acting. Once those proposals come in, we can then decide whether we wish to commit to a more aggressive installation process, or defer installation based upon other competing budget priorities. I also have some additional comments based upon some arguments that I expect may arise during our discussion. During previous discussions on solar, some have indicated that we should simply defer to Mid -American, and make progress at the same rate that they expand renewable energy production. While I commend Mid -American for acting, this posture means that our progress will be tied only to the progress of Mid -American. Iowa City needs to set a higher standard and must demonstrate that higher standard by expanding our renewable energy production here. Some have cited the high cost of solar as a reason to delay acting. At least so far, I have not seen any specific numbers relating to the cost of solar installation. While cost is, of course, a very important factor, this proposal will finally allow us concrete numbers to evaluate prior to any decision on solar infrastructure. It is too early to debate until we get up to date numbers. Some may argue that we should delay and wait for the conclusion of our Climate Mitigation Plan's recommendations. The mandate of that committee is to reduce our City's carbon emissions. That is a complex undertaking and I eagerly await their recommendations; however, I don't believe we should wait for 14 months before we begin taking concrete measures to reduce our carbon emissions. We should act now, and can begin taking measurements later. This request for proposal will provide an important first step to allowing us to reduce our carbon footprint. I have reviewed this proposal with Geoff Fruin prior to sending to you for our upcoming discussion. I made modifications to a draft proposal based upon his feedback. He indicated that we may wish to provide staff flexibility to consider wind at certain municipal facilities. To the extent that additional flexibility would not unnecessarily complicate a solar RFP, I certainly would not have any objection to our terrific staff taking proactive measures to reduce our carbon footprint through expansion of regenerative energy sources including wind. Finally, I believe we should view our upcoming discussion as a first step and not necessarily as a final decision on moving forward. If there any concerns that arise during the work session, I hope that we can obtain additional information from staff, or solicit more public input prior to making any final decision on this issue. To the extent that it is feasible, we also may wish to solicit feedback from local solar providers at a separate work session. I am looking forward to a candid discussion at our upcoming work session. Thank you in advance for taking the time to consider this proposal. czt;lkti FTP17 CITY OF IOWA CITY UNESCO CRY OF ERERATURE PENDING CITY COUNCIL WORK SESSION TOPICS April 26, 2017 May 16th 1. Recap of the State legislative session Strategic Plan / Budget Related Topics: 1. Significantly improve the Council and staff's ability to engage with diverse populations on complex or controversial topics 2. Identify a substantive and achievable goal for the provision of affordable housing in Iowa City and implement strategies to achieve this goal 3. Determine scope of Council identified complete streets study 4. Discuss expectations for working with the ICCSD, Kirkwood Community College, Iowa Works, labor organizations, and others to explore the feasibility of an industrial arts/crafts facility in Iowa City Other Topics: 1. Review the Child Data Snapshot (IP2 2/18) and discuss related strategies with local stakeholders 2. Discuss creation of an ad-hoc committee on social justice and racial equity 3. Joint meeting with Johnson County (May 24th) 4. Joint meeting with the Telecommunications Commission 5. Neighborhood Stabilization 6. Code review in light of Lusk Avenue project r CITY OF IOWA CITY 1P6 -'�� MEMORANDUM Date: April 26, 2017 To: City Council From: Simon Andrew, Assistant to the City Manager Re: ICCSD Bond Referendum Ballot Language Introduction: At their April 25, 2017 formal meeting, the Iowa City Community School District (ICCSD) Board of Directors approved ballot language for the 2017 General Obligation Bond referendum. The approved ballot language is reprinted below and an action timeline is attached. City staff will begin to draft a resolution of support for City Council consideration, per Council's direction at the April 18, 2017 work session. Staff will also work with ICCSD for the distribution of public information materials. The expected date of the referendum election is September 12, 2017. History/Background: ICCSD has planned a number of facility projects that further the District's Facilities Master Plan. The cost of the improvements that will be funded with GO Bonds is such that voter approval is required. On a 5-2 vote, the ICCSD Board of Directors approved the following ballot language: Shall the Board of Directors of the Iowa City Community School District in the County of Johnson, State of Iowa, be authorized to contract indebtedness and issue General Obligation Bonds in an amount not to exceed $191,525,000 to provide funds to address health, safety, and accessibility issues in all school buildings, including air conditioning all school buildings, reducing the use of temporary classroom structures in the District, addressing classroom, lunchroom, and gymnasium overcrowding, and dedicating rooms to art, music, prekindergarten, and science by constructing, furnishing and equipping a new building, constructing additions to and/or remodeling, repairing, and improving the school buildings remaining in the District's Facilities Master Plan, as follows: Mann and Lincoln renovations, Liberty High athletic facilities construction and site improvements, new elementary school construction in North Liberty and site improvements, West High renovation, South East and North Central Junior High additions, Shimek renovation, City High addition and upgrades, Wood addition, Wickham upgrades, Garner and Northwest additions, Liberty High addition, Horn renovation, Kirkwood addition, Borlaug, Alexander, and Lemme additions, and Tate High addition and upgrades? Discussion of Solutions: The City Council's 2016-2017 Strategic Plan identifies, "Provide timely and appropriate input on the ICCSD's planned 2017 bond referendum" as an action item under the goal of "Enhance Community Engagement and Intergovernmental Relations." The information above and attached action timeline is intended to assist Council in providing input. To meet the legal obligations of submitting a ballot referendum question to the ICCSD voters with a target date of September 12, 2017, the following steps must be taken: General Obligation Bond Referendum Action Timeline Bd Start Date End Date Action Required Receive feedback from the Board of Education on the proposed December 13, 2016 January 10, 2017 administrative building equity, capacity, scope, & sequence changes x January 10, 2017 January 24, 2017 Incorporate formalized community feedback (listening posts / Thought Exchange) into IMP Estimate cost of projects to be funded by GO Bond proceeds; Draft x January 24, 2017 February 28, 2017 proposed bond proposition language and determine bond proceeds size to satisfy estimated project scope of work. x April 11, 2017 April 25, 2017 School Board reviews draft proposition language and provides input for changes. x April 25, 2017 April 25, 2017 School Board approves final bond proposition language to be placed on community petitions and ballot question. Petitions circulated for signatures. Must be signed by 25% of eligible electors who voted in the Sept. 8, 2015 school board April 26, 2017 June 27, 2017 election UNLESS A SPECIAL ELECTION WAS HELD TO FILL A VACANCY SINCE THEN. Johnson County auditor records show 25% of the July 19, 2016 special election total of 5,759 = 1,440 SIGNATURES REQUIRED Petitions are filed with the school board president. President calls a x June 27, 2017 June 27, 2017 meeting to take action on the petitions and fixes July 25, 2017 as that date. x July 25, 2017 July 25, 2017 Board fixes a time for the proposition ballot referendum. This date will be September 12, 2017. Johnson County Commissioner of Elections is notified to prepare July 26, 2017 August 4, 2017 the ballot for the September 12, 2017 referendum which is the day after nomination papers must be filed. July 27, 2017 September 11, 2017 Community education presentations and information meetings. September 12, 2017 September 12, 2017rRefe0rendum election day. 60% of the total vote cast on the psition is required to pass. If election fails any election that includes parts or all of the failed proposition, or which is substantially similar to the failed ro osition, another election may not be held for 6 months. ( 04/03/2018 is next available x =Board Action Required r �--^-.-04 CITY OF IOWA CITY �p7 =,l MEMORANDUM Date: April 25, 2017 To: Geoff Fruin, City Manager From: Jann Ream, Neighborhood Development Services Re: Downtown CoSign program History/Background Last October, the Downtown District requested financial assistance from the City of Iowa City to help the district and downtown business owners participate in a new national sign program called CoSign. The program, initiated by the American Sign Museum in Cincinnati, Ohio, provides a platform that brings together business owners, artists and fabricators to create improved signage in the downtown area. The City granted the District $10,000.00 for fiscal year 2017 which covered enrollment in the program and travel costs for the advisors from the American Sign Museum. The City approved an additional $10,000.00 in fiscal year 2018 to help business owners with the costs associated with new signage and to reward the winning designers. Midwest One Bank is an additional sponsor of the program. Update This past February, the Downtown district sent a representative, Nate Kaeding, to Cincinnati to learn how to facilitate the program. The Downtown District then put out a call to downtown business owners, designers and fabricators to inform them about the program and solicit participation. The first informational meetings occurred on March 29th and 30th which brought all participants together to explain the details of the program. The Downtown District was hoping to get 10-20 business owners willing to participate; 25 business owners have signed on. Approximately 60 to 70 artists and designers picked up informational packets. In the informational packet, designers were given the names of each participating business which also included a short summary from the business owner of what they wanted for their new sign. All of the signs are required to be projecting signs. The goal is to provide creative signage geared to the slower traffic speeds and pedestrian traffic of the Downtown District and Northside Market Place. Design submissions will be matched to each business and the business owner will select the sign and designer they want to work with. On May 2nd, there will a prototyping blitz where the business owners, designers, fabricators, installers and city inspections staff will get together to formalize the plans for each sign. The final refined proposals will be returned to be judged by a group of independent jurors for the best 12 sign designs. Selected signs will receive a monetary award: $600.00 to business owner and $600.00 to the designer. It is the hope of the CoSign facilitators that even those business owners that are not awarded any money will still go forward with their sign by taking advantage of the design expertise made available to them by the program. All of the signs will be installed around the first week in August but will be covered with a tarp until the grand unveiling on August 111h during Midwest One's "Rock the Chalk" event downtown. What is CoSign? The CoSign project is a collaboration among the American Sign Museum, The Iowa City Downtown District, the City of Iowa City, presenting sponsor MidWestOne Bank and the greater Iowa City community to design and install a critical mass of new business signage in the downtown district to increase economic activity in the community. The signage will be created by a unique partner- ship of teams consisting of a small business owner, a visual art- ist and a professional sign fabricator, all coordinated through the leadership and expertise of theAmerican Sign Museum and TCDD. How does it work? CoSign will facilitate the pairing together of small business own- ers interested in new signage and local artists interested in sub- mitting sign proposals. Business owner/artist team collaborate with expert sign fabricators during a rapid prototyping workshop to solidify their final designs. This is a competition. A jury chooses the top 12 teams based on originality, relative improvement, context and ability/need to move forward to fabrication. Upon selection, CoSign will help facilitate the approval process with the City and each business owner/artist team works with a sign fabricatorto ensure theirdesign can be produced on time and within budget. Businesses will contract directly with sign fabri- cators. Signs will be installed in early August and on August 11 the signs will be unveiled to the community during MidWestOne's "Rock the Chalk". Who can apply for a sign? On -street businesses, seeking projecting signs ONLY, located with- in the Iowa City Downtown District boundaries are encouraged to apply. CoSign does include the The Northside neighborhood. Business + Artist + Signmaker= CoSign IS 5>Ox50PE0 Pv N i Bea Stone How much will it cost me? Costs of projecting storefront signs can vary widely depending upon material and functionality and could range anywhere from $3,000 to (the sky's the limit!). If chosen by the jury, business owners will be awarded a maximum $1,200 prize. The partner artist/designer will receive $600 of the award stipend. Upon installation of your sign, the winning businesses will each receive the remaining $600 award OR an award equivalent to 20% of their fabrication + installation costs, whichever amount is LESS. Earnest money will be required to partici- pate and will be returned to all participating businesses upon comple- tion of the prototyping blitz. How do I apply? Business owners interested in applying must submit online at: httpJ/tinyud.com/hnw6423 The online application asks for the following information: 1. Name and address of business 2. Contact information of business owner and building owner 3. Number of years in business at current location. 4. A short statement (250-500 words) explaining how a new sign would benefit your business 5. Photos of current business fagadeand signage. In order to be considered, applications must be submitted by: Friday, March 24, 2011 AND applicants must drop off $200 earnest money to ICDD offices at 103 E. College St. suite 200 Businesses applying must be available for the following dates: March 295:30-fpm Informational workshop for all artists and OR March 30 7:30-9am: businesses. Week of April 17: Meet with CoSign to review design submis- sions from artists and make final selection May 2: Rapid Prototyping Blitz. Artist/Business owner teams work with a fabricator to formalize sign design plans. Evening event. lune/July: Meet with fabricator and artist team tofol- low sign throughout the fabrication process. Where can I direct my questions? Nate Kaeding at cosign@downtowniowacity.com I" CITY OF IOWA CITY QUARTERLY INVESTMENT REPORT January 1, 2017 to March 31, 2017 Finance Department Prepared by: Brian Cover Senior Accountant OVERVIEW The City of Iowa City's investment objectives are safety, liquidity and yield. The primary objective of the City of Iowa City's investment activities is the preservation of capital and the protection of investment principal. The City's investment portfolio remains sufficiently liquid to enable the City to meet operating requirements that cash management procedures anticipate. In investing public funds, the City's cash management portfolio is designed with the objective of regularly exceeding the average return on the six month U.S. Treasury Bill. The Treasury Bill is considered a benchmark for riskless investment transactions and therefore comprises a minimum standard for the portfolio's rate of return. Since the city's investments are mostly between the six month and twelve month range, the yield curve for the twelve month U.S. Treasury Bill has been added to the chart. The rolling average return on the six month U.S. Treasury Bill for the prior 365 days was 0.53% and the twelve month rate was 0.68%. The investment program seeks to achieve returns above this threshold, consistent with risk limitations and prudent investment principles. The rate of return on the City's entire portfolio for the quarter was 0.78%. (See exhibit A) Investments purchased by the City of Iowa City for the third quarter of this fiscal year had an average return of 0.93%. Rates on new investment purchases in our operating cash portfolio for the third quarter were 24 basis points higher than investments purchased at this time last year. The increase is due to the longer maturity periods and higher interest rates of the new investments. The federal funds rate is the interest rate at which banks lend to each other. In the March 15th meeting of the Federal Open Market Committee, the decision was made to raise the target range for the federal funds rate from % to 1 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a return to 2 percent inflation. (See exhibit B) The quarterly investment report lists investments by fund, by institution, by maturity date, and investments purchased and redeemed. New official state interest rates setting the minimum that may be paid by Iowa depositories on public funds in the 180 to 364 day range during this quarter were 0.05% in January, 0.05% in February, and 0.05% in March 2017. CITY OF IOWA CITY INVESTMENTS ON HAND DETAIL LISTING BY MATURITY DATE 31 -Mar -17 INSTITUTION INVESTMENT PURCHASE MATURITY INVESTMENT INTEREST NAME TYPE DATE DATE AMOUNT RATE IPAIT IPAIT 27 -Sep -06 $ 12,328,193.32 0.40% HILLS BANK MONEY MRKT 30 -Mar -10 $ 9,079,689.81 0.20% WELLS FARGO SAV 25 -Jul -12 $ 597,129.37 0.15% US BANK MONEY MRKT 22 -Jun -16 $ 10,019,398.60 0.25% UICCU CD 22 -Jul -14 24 -Jul -19 $ 2,600,000.00 2.01% MIDWESTONE BANK CD 29 -Apr -15 29 -Oct -17 $ 1,000,000.00 1.02% UICCU CD 26 -Jun -15 25 -Jun -17 $ 844,150.00 0.95% CR BANK & TRUST CD 18 -Aug -15 18 -Aug -17 $ 775,000.00 0.68% MIDWESTONE BANK CD 30 -Sep -15 30 -Sep -17 $ 15,000,000.00 1.02% WELLS FARGO SECURITIES NOTE 20 -Nov -15 15 -May -18 $ 500,000.00 1.04% CBI BANK & TRUST CD 05 -May -16 05 -May -17 $ 2,000,000.00 0.82% CBI BANK & TRUST CD 05 -May -16 12 -May -17 $ 2,000,000.00 0.82% CR BANK & TRUST CD 24 -May -16 24 -May -17 $ 2,000,000.00 0.92% CR BANK & TRUST CD 10 -Jun -16 12 -Jun -17 $ 2,000,000.00 0.81% CR BANK & TRUST CD 30Sep-16 31 -Mar -17 $ 2,000,000.00 0.75% FARMERS & MERCHANTS BANK CD 17 -Jun -16 19 -Jun -17 $ 2,000,000.00 0.76% IPAIT CD 16 -Sep -16 19 -Sep -17 $ 2,384,542.00 0.85% IPAIT CD 16 -Sep -16 16 -Mar -18 $ 2,364,542.00 0.95% IPAIT CD 16 -Sep -16 17 -Sep -18 $ 2,364,542.00 0.95% IPAIT CD 16 -Sep -16 18 -Mar -19 $ 2,364,542.00 1.05% IPAIT CD 16 -Sep -16 15 -Sep -19 $ 2,364,540.00 1.15% MIDWESTONE BANK CD 13 -Oct -16 07 -Apr -17 $ 2,000,000.00 0.63% TWO RIVERS BANK CD 13 -Oct -16 14 -Apr -17 $ 2,000,000.00 0.85% MIDWESTONE BANK CD 21 -Oct -16 21 -Apr -17 $ 2,000,000.00 0.66% MIDWESTONE BANK CD 03 -Nov -16 03 -May -17 $ 2,000,000.00 0.65% MIDWESTONE BANK CD 03 -Nov -16 10 -May -17 $ 2,000,000.00 0.67% MIDWESTONE BANK CD 03 -Nov -16 17 -May -17 $ 2,000,000.00 0.69% TWO RIVERS BANK CD 10 -Nov -16 10 -Nov -17 $ 2,000,000.00 1.02% MIDWESTONE BANK CD 17 -Nov -16 17 -Nov -17 $ 2,000,000.00 0.89% MIDWESTONE BANK CD 17 -Nov -16 27 -Nov -17 $ 2,000,000.00 0.92% MIDWESTONE BANK CD 30 -Nov -16 01 -Dec -17 $ 2,000,000.00 0.93% MIDWESTONE BANK CD 15 -Dec -16 21 -Dec -17 $ 2,000,000.00 0.95% TWO RIVERS BANK CD 15 -Dec -16 15 -Dec -17 $ 2,000,000.00 0.93% CBI BANK & TRUST CD 17 -Jan -17 17 -Jan -18 $ 2,000,000.00 1.32% CBI BANK & TRUST CD 17 -Jan -17 24 -Jan -18 $ 2,000,000.00 1.32% MIDWESTONE BANK CD 25 -Jan -17 25 -Jul -17 $ 2,000,000.00 0.81% TWO RIVERS BANK & TRUST CD 25 -Jan -17 01 -Aug -17 $ 2,000,000.00 1.04% TWO RIVERS BANK & TRUST CD 25 -Jan -17 08 -Aug -17 $ 2,000,000.00 1.06% TWO RIVERS BANK & TRUST CD 25 -Jan -17 15 -Aug -17 $ 2,000,000.00 1.09% TWO RIVERS BANK & TRUST CD 25 -Jan -17 22 -Aug -17 $ 2,000,000.00 1.11% NXT BANK CD 03 -Feb -17 02 -Aug -18 $ 2,000,000.00 1.24% MIDWESTONE BANK CD 03 -Feb -17 09 -Aug -18 $ 2,000,000.00 1.26% CBI BANK CD 03 -Feb -17 16 -Aug -18 $ 2,000,000.00 1.389/a CBI BANK CD 03 -Feb -17 23 -Aug -18 $ 2,000,000.00 1.38% MIDWESTONE BANK CD 10 -Feb -17 09 -Feb -18 $ 2,000,000.00 0.97% MIDWESTONE BANK CD 10 -Feb -17 16 -Feb -18 $ 2,000,000.00 1.00% MIDWESTONE BANK CD 10 -Feb -17 23 -Feb -18 $ 2,000,000.00 1.03% MIDWESTONE BANK CD 10 -Feb -17 02 -Mar -18 $ 2,000,000.00 1.06% MIDWESTONE BANK CD 24 -Feb -17 29 -Dec -17 $ 2,000,000.00 0.86% MIDWESTONE BANK CD 24 -Feb -17 05Jan-18 $ 2,000,000.00 0.88% MIDWESTONE BANK CD 24 -Feb -17 12 -Jan -18 $ 2,000,000.00 0.91% MIDWESTONE BANK CD 10 -Mar -17 09 -Mar -18 $ 2,000,000.00 1.05% MIDWESTONE BANK CD 10 -Mar -17 16 -Mar -18 $ 2,000,000.00 1.09% MIDWESTONE BANK CD 17 -Mar -17 08 -Dec -17 $ 2,000,000.00 1.16% MIDWESTONE BANK CD 17 -Mar -17 15 -Dec -17 $ 2,000,000.00 1.18% CR BANK & TRUST CD 03 -Mar -17 02 -Feb -18 $ 2,000,000.00 0.91% CBI BANK & TRUST CD 03 -Mar -17 02 -Feb -18 $ 2,500,000.00 0.91% TOTAL $ 149,066,269.10 TOTAL REDEMPTIONS $ (64,984,995.22 INVESTMENTS ON HAND AT 03131117 $ 149,066,269.10 CITY OF IOWA CITY INVESTMENT ACTIVITY FOR THE QUARTER ENDED MARCH 31, 2017 INVESTMENT PURCHASE MATURITY INVESTMENT INTEREST INSTITUTION TYPE DATE DATE AMOUNT RATE INVESTMENTS ON HAND AT 12131116 $ 154,199,225.17 PURCHASES 01/01/17 TO 3131/17 CBI BANK &TRUST OPERATING 17 -Jan -17 17 -Jan -18 $ 2,000,000.00 1.320% CBI BANK & TRUST OPERATING 17 -Jan -17 24Jan-18 $ 2,000,000.00 1,320°/ US BANK OPERATING 01 -Jan -17 $ 13,224.20 0.250% IPAIT OPERATING OWan-17 $ 1,115.17 0.272% HILLS BANK OPERATING OWan-17 S 76,755.18 0.200% WELLS FARGO OPERATING 01Jan-17 $ 94,293.21 0.150% IPAIT OPERATING 20Jan-17 $ 5,000,000.00 0.272° WELLS FARGO SECURITIES SEWER RESERVES 01 -Jan -17 15 -May -18 S 490.00 1.040% WELLS FARGO OPERATING 01 -Jan -17 $ 140,232.22 0.150% MIDWESTONE BANK OPERATING 25 -Jan -17 25 -Jul -17 S 2,000,000.00 0.810% TWO RIVERS BANK & TRUST OPERATING 25 -Jan -17 01 -Aug -17 $ 2,000,000.00 1.041% TWO RIVERS BANK & TRUST OPERATING 25 -Jan -17 08 -Aug -17 $ 2,000,000.00 1.061% TWO RIVERS BANK & TRUST OPERATING 25 -Jan -17 15 -Aug -17 $ 2,000,000.00 1.091% TWO RIVERS BANK &TRUST OPERATING 25 -Jan -17 22 -Aug -17 $ 2,000,000.00 1.111° IPAIT OPERATING 31 -Jan -17 $ 246.70 0.278% US BANK OPERATING 31 -Jan -17 $ 2,126.31 0.250% HILLS BANK OPERATING 31 -Jan -17 $ 1,541.80 0.200% WELLS FARGO OPERATING 31 -Jan -17 $ 1,859.43 0.150° NXT BANK PARKING RESERVE FUND 03 -Feb -17 02 -Aug -18 $ 2,000,000.00 1.240% MIDWESTONE BANK EQUIPMENT REPLACEMENT FUND 03 -Feb -17 09 -Aug -18 $ 2,000,000.00 1.260% CBI BANK LANDFILL REPLACEMENT RESERVE 03 -Feb -17 16 -Aug -18 $ 2,OOD,000.00 1.380% CBI BANK LANDFILL REPLACEMENT RESERVE 03 -Feb -17 23 -Aug -18 $ 2,000,000.00 1.380% MIDWESTONE BANK OPERATING 10 -Feb -17 09 -Feb -18 $ 2,000,000.00 0.970% MIDWESTONE BANK OPERATING 10 -Feb -17 16 -Feb -18 $ 2,000,000.00 1.000% MIDWESTONE BANK OPERATING 10 -Feb -17 23 -Feb -18 $ 2,000,000.00 1.030% MIDWESTONE BANK OPERATING 10 -Feb -17 02 -Mar -18 $ 2,000,000.00 1.060% IPAIT OPERATING 13 -Feb -17 $ 6,000,000.00 0.30300/ MIDWESTONE BANK OPERATING 24 -Feb -17 29 -Dec -17 $ 2,000,000.00 0.860% MIDWESTONE BANK OPERATING 24 -Feb -17 05 -Jan -18 $ 2,000,000.00 0.880% MIDWESTONE BANK OPERATING 24 -Feb -17 12 -Jan -18 $ 2,000,000.00 0.910% HILLS BANK OPERATING 28 -Feb -17 $ 1,392.83 0.200% IPAIT OPERATING 28 -Feb -17 S 761.87 0.296% WELLS FARGO OPERATING 28 -Feb -17 $ 556.49 0.150% US BANK OPERATING 28 -Feb -17 $ 1,920.92 0.250% CR BANK & TRUST OPERATING 03 -Mar -17 02 -Feb -18 $ 2,000,000.00 0.910% CBI BANK & TRUST WATER IMPR, B & I RESERVES 03 -Mar -17 02 -Feb -18 $ 2,500,000.00 0.910% MIDWESTONE BANK OPERATING 10 -Mar -17 09 -Mar -18 $ 2,000,000.00 1.050% MIDWESTONE BANK OPERATING 10 -Mar -17 16 -Mar -18 $ 2,000,000.00 1.090% MIDWESTONE BANK OPERATING 17 -Mar -17 08-0eo-17 $ 2,000,000.00 1.160% MIDWESTONEBANK OPERATING 17 -Mar -17 15 -Dec -17 $ 2,000,000.00 1.180% IPAIT OPERATING 31 -Mar -17 $ 13,319.58 0.400% US BANK OPERATING 31 -Mar -17 $ 2,127.17 0.250% WELLS FARGO OPERATING 31 -Mar -17 $ 76.07 0.150% TOTAL PURCHASES $ 59,852,039.15 REDEMPTIONS 01/01/17 TO 3/31/17 HILLS BANK OPERATING 16 -Dec -15 13 -Jan -17 $ (2,000,000.00) 1.000% TWO RIVERS BANK OPERATING 18 -Jul -16 16 -Jan -17 $ (2,000,000.00) 0.590% WELLS FARGO OPERATING 14 -Apr -14 $ (5,000,000.00) 0.150% MIDWESTONE BANK OPERATING 27 -Jul -16 27 -Jan -17 $ (2,000,000.00) 0.570% WELLS FARGO OPERATING 14 -Apr -14 $ (19,140,232.22) 0.150% CR BANK &TRUST OPERATING 09 -Aug -16 09 -Feb -17 $ (2,000,000.00) 0.670% MIDWESTONE BANK OPERATING 11 -Jan -16 10 -Feb -17 $ (2,000,000.00) 0.910% WELLS FARGO OPERATING 25 -Jul -12 $ (14,000,000.00) 0.150% CR BANK & TRUST OPERATING 24 -Aug -16 24 -Feb -17 $ (2,000,000.00) 0.780% CR BANK & TRUST OPERATING 02Sep-16 03 -Mar -17 $ (2,000,000.00) 0.710% MIDWESTONE BANK WATER IMPROVEMENT RESERVE 04 -Mar -16 03 -Mar -17 $ (450,000.00) 0.900% MIDWESTONE BANK WATER B & I RESERVE 04 -Mar -16 03 -Mar -17 $ (2,030,221.00) 0.910% MIDWESTONE BANK OPERATING 09 -Sep -16 10 -Mar -17 $ (2,000,000.00) 0.650% CR BANK & TRUST OPERATING 13 -Sep -16 10 -Mar -17 $ (2,000,000.00) 0.700° MIDWESTONE BANK OPERATING 09Sep-16 17 -Mar -17 $ (2,O00,OOD.00) 0.67000/ CR BANK & TRUST OPERATING 13 -Sep -18 17 -Mar -17 $ (2,000,000.00) 0.70000/ IPAIT 2016 CHAUNCEY BONDS 16 -Sep -16 17 -Mar -17 $ (2,364,542.00) 0.670% TOTAL REDEMPTIONS $ (64,984,995.22 INVESTMENTS ON HAND AT 03131117 $ 149,066,269.10 CITY OF IOWA CITY INVESTMENTS ON HAND SUMMARY BY FUND 3131117 3/31/16 FUND INVESTMENT INVESTMENT TYPE AMOUNT AMOUNT ALL OPERATING FUNDS GENERAL OBLIGATION BOND FUND SEWER BOND RESERVE FUND WATER BOND RESERVE FUND PARKING RESERVE FUND EQUIPMENT RESERVE FUND LANDFILL RESERVE FUND ifell f_1I $ 132,047,119.10 $ 5,719,150.00 $ 2,500,000.00 $ 2,000,000.00 $ 2,0000,000.00 $ 4,000,000.00 $ 105,000,344.17 $ 5,718,660.00 $ 2,480,221.00 $ 149,066,269.10 $ 113,199,225.17 CITY OF IOWA CITY INVESTMENTS ON HAND LISTING BY INSTITUTION TOTAL $ 149,066,269.10 $ 113,199,225.17 3131/17 3/31/16 INSTITUTION INVESTMENT INVESTMENT DEPOSITORY NAME AMOUNT AMOUNT LIMIT BANK OF THE WEST $ $ $ 75,000,000.00 BANKER'S TRUST $ $ $ 20,000,000.00 CEDAR RAPIDS BANK & TRUST $ 8,775,000.00 $ 10,775,000.00 $ 20,000,000.00 FARMERS & MERCHANTS SAVINGS BANK $ 2,000,000.00 $ 2,000,000.00 $ 15,000,000.00 FIRST AMERICAN BANK $ - $ - $ 35,000,000.00 CBI BANK & TRUST $ 14, 5000,000.00 $ 4,000,000.00 $ 15,000,000.00 HILLS BANK & TRUST $ 9,079,669.£1 $ 11,000,000.00 $ 25,000,000.00 IOWA PUBLIC AGENCY INVESTMENT TRUST $ 24,150 901.32 $ 6,500,000.00 N/A LIBERTY BANK $ - $ - $ 25,000,000.00 MIDWESTONE BANK $ 60,000,000.00 $ 22,480,221.00 $ 100,000,000.00 NXT BANK $ 2,000,000.00 $ - $ 2,000,000.00 TWO RIVERS BANK $ 14,000,000.00 $ 4,000,000.00 $ 15,000,000.00 U OF I COMMUNITY CREDIT UNION $ 3,444,150.00 $ 3,444,150.00 $ 50,000,000.00 US BANK $ 10,019,398.60 $ - $ 65,000,000.00 WELLS FARGO SECURITIES $ 500,000.00 $ 9,583160.00 N/A WELLS FARGO BANK $ 597,129.37 $ 39,416,694.17 $ 50,000,000.00 WEST BANK $ - $ - $ 35,000,000.00 TOTAL $ 149,066,269.10 $ 113,199,225.17 City of Iowa City vs. 6 Month Treasury Bill EXHIBIT A —*--City of Iowa City --W-6 Month T-bill ---* 12 Month T-bill 0.9 0.8 >J Gj0 QQi �� 0.7 L m 0.6 L 0.5 m 0.4 c m 0.3 m a I 0.2 0.1 0.0 <' c Q d EXHIBIT A —*--City of Iowa City --W-6 Month T-bill ---* 12 Month T-bill >J Gj0 QQi �� EXHIBIT A —*--City of Iowa City --W-6 Month T-bill ---* 12 Month T-bill Federal Funds Rate 3.0 2.0 - 1 +r U N L- W 4-8 1.0 0.0 pCb pp pp pp �p ^p v�) 1p vp JC 0V Jp ¢rV Jp ?iV JJ QiV C' EXHIBIT B 04-27-17 Issue Investment RatingI P9 Date of Sale: Tuesday, May 2, 2017 Moody's Investors ... Between 9:30 and 10:00 A.M., C.D.T. (Closed Speer Auction) (Rating Requested) 10:00 A.M., C.D.T. (Sealed Bids) (Alternate Bid Methods) Official Statement Assuming compliance with certain covenants, in the opinion of Ahlers & Cooney, P.C., Bond Counsel, under present law and assuming continued compliance with the requirements of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on the Bonds is excludable from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations. Interest on the Bonds is not exempt from present Iowa income taxes. See "TAX MATTERS" herein for a more detailed discussion. $9,765,000* CITY OF IOWA CITY Johnson County, Iowa General Obligation Bonds, Series 2017A Dated Date of Delivery Book -Entry Due Serially June 1, 2018 - 2027 The $9,765,000• General Obligation Bonds, Series 2017A (the `Bonds") are being issued by the City of Iowa City, Johnson County, Iowa (the "City"). Interest is payable semiannually on June 1 and December I of each year, commencing December 1, 2017. Interest is calculated based on a 360 -day year of twelve 30 -day months. The Bonds will be issued using a book -entry system. The Depository Trust Company ("DTC'I, New York, New York, will act as securities depository for the Bonds. The ownership of one fully registered Bond for each maturity will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Bonds will be made to purchasers. The Bonds will mature on June I in the following years and amounts. AMOUNTS*, MATURITIES, INTEREST RATES, PRICES OR YIELDS AND CUSIP NUMBERS Principal Due Interest Price or CUSIP Principal Due Interest Price or CUSIP Amount* June t Rate Yield Number(1) Amount* June 1 Rate Yield Number(1) $900,000...........2018 % % $ 980,000......... 2023 % % 905,000 ........... 2019 _% % 1,000,000......... 2024 % _% 920,000 ........... 2020 _% % 1,025,000......... 2025 % 940,000 ........... 2021 % % 1,055,000......... 2026 % 955,000...........2022 % % 1,085,000......... 2027 % Any consecutive maturities may be aggregated into term bonds at the option ofthe bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. OPTIONAL REDEMPTION Bonds due June 1, 2018 - 2023, inclusive, are not subject to optional redemption. Bonds due Jane 1, 2024 - 2027, inclusive, are callable in whole or in part on any date on or after June 1, 2023, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the City and within any maturity by lot. See "OPTIONAL REDEMPTION" herein. PURPOSE, LEGALITY AND SECURITY The Bond proceeds will be used to: (i) finance the cost of various essential and general corporate purpose capital improvements; (ii) finance the costs of aiding in the planning, undertaking and carrying out of urban renewal projects; and (iii) pay the costs of issuance of the Bonds. See "THE PROJECT" herein. In the opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, the Bonds will constitute valid and legally binding obligations of the City payable both as to principal and interest from ad valorem taxes levied against all taxable property within the corporate limits of the City without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise ofjudicial discretion. The City does not intend to designate the Bonds as "qualified tax-exempt obligations" pursuant to the small issuer exception provided by Section 265(b)(3) of the Internal Revenue Code of 1986. This Official Statement is dated April 20, 2017, and has been prepared under the authority of the City. An electronic copy of this Official Statement is available from the www.soeerfrnancial.com web site under "Official Statement Sales Calendar". Additional copies may be obtained from Mr. Dennis Bockenstedt, Finance Director, City of Iowa City, 410 E. Washington Street, Iowa City, Iowa 52240, or from the Registered Municipal Advisors to the City. Speer Knancial, Inc. '� nr�Pwr..asrtwr.rowu..m+ LI (.OamO.Y.(•IfRl.rlmlY•MAIOVgPiA 0101 nIM�Pm7h� � PmMam -Subject to principal adjustment in accordance with the (ficial Terms ofOfjering (1) CUS1Pnumbersappmnngin1hb acid Sim m1h.1,em providedby the CUSIPSerkiltureau,"hich isman°ged on DehafjojrheAmeriran Banea A.vociafbn by S&PCaphal IQ, apart ofMc(3. Hili Fimncial Irc. The Ciry b not rupomiDte for these/¢non olCUSm numbers aMmahes no repruenmdon as ro their aorrecmeas on rhe Banda ar m aetfonh an the rover fthm ficial Staremmt. For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the City from time to time (collectively, the "Official Statement"), may be treated as an Official Statement with respect to the Bonds described herein that is deemed near final as of the date hereof (or the date of any such supplement or correction) by the City. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, 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. Any such addendum or addenda shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference. Alternatively, such final terms of the Bonds and other information may be included in a separate document entitled "Final Official Statement' rather than through supplementing the Official Statement by an addendum or addenda. No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations with respect to the Bonds other than as contained in the Official Statement or the Final Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the City. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE RESPECTIVE DATES THEREOF. References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. This Official Statement does not constitute an offer to sell, or solicitation of an offer to buy, any securities to any person in any jurisdiction where such offer or solicitation of such offer would be unlawful. 1MIIq DDI WIVOWNII DNMI Page BONDISSUE SUMMARY....................................................................................................................................................1 BONDHOLDERS' RISKS.....................................................................................................................................................2 SecondaryMarket............................................................................................................................................................... 2 RatingsLoss........................................................................................................................................................................2 Forward -Looking Statements..............................................................................................................................................3 Tax Matters and Loss of Tax Exemption............................................................................................................................ 3 DTC -Beneficial Owners..................................................................................................................................................... 3 TaxLevy Procedures..........................................................................................................................................................4 Stateand Federal Funding...................................................................................................................................................4 OtherFactors.......................................................................................................................................................................4 THECITY..............................................................................................................................................................................4 CityOrganization and Services...........................................................................................................................................4 CommunityLife.................................................................................................................................................................. 5 Education............................................................................................................................................................................ 5 Transportation..................................................................................................................................................................... 5 SOCIOECONOMIC INFORMATION..................................................................................................................................5 Population........................................................................................................................................................................... 5 Employment........................................................................................................................................................................ 6 BuildingPermits.................................................................................................................................................................7 Housing............................................................................................................................................................................... 7 Income................................................................................................................................................................................. 8 Agriculture.......................................................................................................................................................................... 8 RetailSales..........................................................................................................................................................................9 THEPROJECT....................................................................................................................................................................... 9 DEBTINFORMATION.......................................................................................................................................................10 DEBTLIMIT....................................................................................................................................................................10 DIRECTDEBT.................................................................................................................................................................10 PROPERTY ASSESSMENT AND TAX INFORMATION................................................................................................12 PropertyTax Assessment..................................................................................................................................................12 PropertyTax Collection....................................................................................................................................................13 LevyLimits....................................................................................................................................................................... 15 TaxLevy Procedures........................................................................................................................................................15 UtilityProperty Tax Replacement....................................................................................................................................16 TaxIncrement Financing..................................................................................................................................................16 Legislation.........................................................................................................................................................................16 FINANCIALINFORMATION............................................................................................................................................18 FinancialReports..............................................................................................................................................................18 No Consent or Updated Information Requested of the Auditor........................................................................................18 Summary Financial Information.......................................................................................................................................18 EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS...................................22 Pensions............................................................................................................................................................................22 Other Post -Employment Benefits(OPEB)........................................................................................................................24 REGISTRATION, TRANSFER AND EXCHANGE........................................................................................................... 24 TAXMATTERS...................................................................................................................................................................25 TaxExemption..................................................................................................................................................................25 NOTQualified Tax -Exempt Obligations..........................................................................................................................25 Tax Accounting Treatment of Discount and Premium on Certain Bonds........................................................................25 OtherTax Advice..............................................................................................................................................................26 Audits................................................................................................................................................................................ 26 Reportingand Withholding...............................................................................................................................................26 TaxLegislation.................................................................................................................................................................26 Enforcement...................................................................................................................................................................... 27 Opinion.............................................................................................................................................................................27 (i) CONTINUING DISCLOSURE............................................................................................................................................27 OPTIONAL REDEMPTION................................................................................................................................................28 LITIGATION........................................................................................................................................................................ 28 LEGALMATTERS..............................................................................................................................................................28 OFFICIAL STATEMENT AUTHORIZATION..................................................................................................................29 INVESTMENTRATING.....................................................................................................................................................29 UNDERWRITING...............................................................................................................................................................29 MUNICIPAL ADVISOR......................................................................................................................................................30 CERTIFICATION................................................................................................................................................................ 30 APPENDIX A -FISCAL YEAR 2016 AUDITED FINANCIAL STATEMENTS APPENDIX B -DESCRIBING BOOK -ENTRY -ONLY ISSUANCE APPENDIX C -DRAFT FORM OF LEGAL OPINION APPENDIX D -DRAFT CONTINUING DISCLOSURE CERTIFICATE OFFICIAL BID FORM OFFICIAL TERMS OF OFFERING City of/oua Ciry, Johnson County, Iowa $9,765.000- General Obligation Bonds, Series 2017A BOND ISSUE SUMMARY This Bond Issue Summary is expressly qualified by the entire Official Statement, including the Official Terms of Offering and the Official Bid Form, which are provided for the convenience of potential investors and which should be reviewed in their entirety by potential investors. Issuer: City of Iowa City, Johnson County, Iowa. Issue: $9,765,000* General Obligation Bonds, Series 2017A. Dated Date: Date of delivery (expected to be on or about June 15, 2017). Interest Due: Each June 1 and December 1, commencing December 1, 2017. Principal Due: Serially each June 1, commencing June 1, 2018 through 2027, as detailed on the front page of this Official Statement. Optional Redemption: Bonds maturing on or after June 1, 2024, are callable at the option of the City on any date on or after June 1, 2023, at a price of par plus accrued interest. See "OPTIONAL REDEMPTION" herein. Authorization: The Bonds are being issued pursuant to authority established in the Code of Iowa, Chapters 384 and 403 and all laws amendatory thereof and supplementary thereto, and in conformity with resolutions of the City Council duly passed and approved. Security: The Bonds are valid and legally binding obligations of the City payable both as to principal and interest from ad valorem taxes levied against all taxable property therein without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. Investment Rating: An investment rating for the Bonds has been requested from Moody's Investors Service, New York, New York. See "INVESTMENT RATING" herein. Purpose: The Bond proceeds will be used to: (i) finance the cost of various essential and general corporate purpose capital improvements; (ii) finance the costs of aiding in the planning, undertaking and carrying out of urban renewal projects; and (iii) pay the costs of issuance of the Bonds. See "THE PROJECT" herein. Tax Matters: Ahlers & Cooney, P.C., Des Moines, Iowa, will provide an opinion as to the tax exemption of the Bonds as discussed under "TAX MATTERS" in this Official Statement. Interest on the Bonds is not exempt from present State of Iowa income taxes. See APPENDIX C for a draft form of legal opinion for the Bonds. Bond Registrar/Paying Agent: Delivery: Book -Entry Form: Denomination: Municipal Advisor: *Subject to change. U.S. Bank, St. Paul, Minnesota. The Bonds are expected to be delivered on or about June 15, 2017. The Bonds will be registered in the name of Cede & Co. as nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository of the Bonds. See APPENDIX B herein. $5,000 or integral multiples thereof. Speer Financial, Inc., Waterloo, Iowa and Chicago, Illinois. City oflowa City, Johnson County, Iowa $9.765,000' General Obligation Bonds, Series 2017A CITY OF IOWA CITY Johnson, County, Iowa Jim Throgmorton Mayor Kinglsey Botchway II Mayor Pro Tem Council Members Rockne Cole Terry Dickens Pauline Taylor Officials Geoff Fruin City Manager Dennis Bockenstedt Finance Director John Thomas BONDHOLDERS' RISKS Secondary Market Susan Mims Julie Voparil Deputy City Clerk Eleanor M. Dilkes, Esq. City Attorney There can be no guarantee that 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, and secondary marketing practices in connection with a particular bond or note 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. Ratings Loss Moody's Investors Service, Inc. ("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 that the rating will 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. City oflowa City, Johnson County, Iowa $9,765.000- General Obligation Bonds, Series 2017A Rating agencies are currently not regulated by any regulatory body. Future regulation of rating agencies could materially alter the methodology, rating levels, and types of ratings available, for example, and these changes, if ever, could materially affect the market value of the Bonds. Forward -Looking Statements This 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 Official Statement, the words "estimate," "forecast," "intend," "expect' and similar expressions identify forward-looking statements. Any forward-looking statement is subject to uncertainty. Accordingly, such statements are subject to risks that could cause actual results to differ, possibly materially, from those contemplated in such forward-looking statements. Inevitably, some assumptions used to develop forward-looking statements will not be realized or unanticipated events and circumstances may occur. Therefore, investors should be aware that there are likely to be differences between forward looking statements and the actual results. These differences could be material and could impact the availability of funds of the City to pay debt service when due on the Bonds. Tax Matters and Loss of Tax Exemption As discussed under the heading "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 prepayment and would remain outstanding until maturity or until prepaid under the prepayment provisions contained in the Bonds, and there is no provision for an adjustment of the interest rate on the Bonds. It is possible that further legislation will be proposed or introduced that could result in changes in the way that tax exemption is calculated, or whether interest on certain securities are exempt from taxation at all. Prospective purchasers should consult with their own tax advisors regarding any other pending or proposed federal income tax legislation. The likelihood of any pending legislation being enacted or whether the currently proposed terms of any pending legislation will be altered or removed during the legislative process cannot be reliably predicted. It is also possible that actions of the City after the closing of the Bonds will alter the tax status of the Bonds, and, in the extreme, remove the tax exempt status from the Bonds. In that instance, the Bonds are not subject to mandatory prepayment, and the interest rate on the Bonds does not increase or otherwise reset. A determination of taxability on the Bonds, after closing of the Bonds, could materially adversely affect the value and marketability of the Bonds. DTC -Beneficial Owners Beneficial Owners of the Bonds may experience some delay in the receipt of distributions of principal of and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC will credit such distributions to the accounts of the Participants which will thereafter credit them to the accounts of the Beneficial Owner either directly or indirectly through indirect Participants. Neither the City nor the Paying Agent will have any responsibility or obligation to assure that any such notice or payment is forwarded by DTC to any Participants or by any Participant to any Beneficial Owner. In addition, since transactions in the Bonds can be effected only through DTC Participants, indirect participants and certain banks, the ability of a Beneficial Owner to pledge the Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will be permitted to exercise the rights of registered Owners only indirectly through DTC and the Participants. See APPENDIX B — Describing Book -Entry Only Issuance. City oflowa City, Johnson County, Iowa $9,765.000* Genera! Obligation Bonds, Series 2017A 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 valuation within the City. See "PROPERTY TAX INFORMATION" herein for more details. As part of the budgetary process 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 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 of the Bonds 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. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. State and Federal Funding There can be no assurance that significant state and local funding to the City will not be interrupted, reduced or withheld under existing presidential executive orders and future federal or state legislation related to immigration and domestic security. The City does not believe such orders and proposed legislation will apply to it. However, due to the broad discretion and authority included in existing presidential executive orders, and the lack of certainty as to the form any future federal and state legislation might take, it is not possible to assess the likelihood of applicability, or the impact such a designation would have upon the ability of the City to provide services at current levels. Other Factors An investment in the Bonds involves an element of risk. 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 Official Statement and the Appendices hereto. THE CITY The City of Iowa City (the "City") is located in East Central Iowa and was incorporated in 1853 under the laws of the state of Iowa (the "State") and operates under the Council/Manager form of government. The 2010 Census reported population at 67,862, which is 9% increase over the 2000 Census population of 62,220. The City is the largest City in Johnson County (the "County") and serves as the County seat. City Organization and Services The City is governed by a seven member Council and each member serves a four-year term. Elections are held every two years, allowing for continuation in office of at least three members in each biennial election. The Council members are elected at large, but three members are nominated from specific districts and the other four are nominated at large. The Mayor is elected by the Council from its own members. Currently the City employs approximately 540 full-time, 60 permanent part-time and 377 temporary employees, including a police force of 82 sworn personnel and a fire department of 64 fire fighters. The City considers its employee relations to be good. The City currently maintains labor agreements with the American Federation of State, County, and Municipal Employees ("AFSCME") which contract expires June 30, 2021; with Police ("PLRO") which contract expires June 30, 2019; and Fire fighters ("IAFF") which contract expires June 30, 2019. The City provides a broad range of services to its citizens including general government, public safety, streets, parks, and cultural facilities. It also operates an airport, a mass transportation system, parking facilities, water treatment, wastewater treatment, storm water collection, sanitation collection and disposal (including landfill operations), cable television, and a housing authority. City oflowa City, Johnson County. lowa $9,765,000- General Obligation Bonds, Series 2017A Community Life The City is the only North American City to be awarded the designation of City of Literature in North America by UNESCO in 2008, which has a goal of fostering cultural diversity. The City hosts a variety of cultural events, such as the Iowa Writers' Workshop, whose graduates include John Irving, Flannery O'Connor, T.C. Boyle; the International Writing Program; the Non -Fiction Writing Program; the Iowa Playwrights' Workshop; and the Iowa Summer Writing Festival. A variety of events sponsored by the City include the Summer of the Arts program, a festival of the arts, a nationally renowned jazz festival, open-air summer movies and free concerts in the pedestrian mall. The City Book Festival, the Iowa Biennial Exhibition, and The Landlocked Film Festival are events hosted by the City. The newly reopened Hancher Auditorium hosts nationally touring theater, dance and musical shows, and has commissioned more than 100 works of music, theater and dance during the last 20 years. Education Public education to the City is provided by the Iowa City Community School District (the "District"), with certified enrollment of 13,982 for Fiscal Year 2016-17. There are approximately 2,346 full and part-time employees of the District. The District owns and operates several pre-school sites, twenty elementary schools, three middle schools, two senior high schools, and one alternative school for ninth through twelfth graders. Education is also provided through the Clear Creek — Amana Community School District, with certified enrollment of 2,005 for Fiscal Year 2016-17. Four year college programs and vocational training are available throughout the area including the University of Iowa and Kirkwood Community College. Transportation The City is approximately 115 miles east of the City of Des Moines, 20 miles southeast of the City of Cedar Rapids and 55 miles northwest of the City of Davenport. The Eastern Iowa Airport is located 20 miles from downtown Iowa City and is served by a number of national and regional air carriers. A general aviation airport, Iowa City Municipal Airport is located on the south side of the City. The Iowa Interstate Railway, and Cedar Rapids and Iowa City Railway provide the City's rail service. Bus transportation is provided by Iowa City Transit, Coralville Transit, and the University of Iowa. There is also a system of paved bicycle paths in the City along the Iowa River and some main roads in the City have paved bicycle shoulders. SOCIOECONOMIC INFORMATION The following demographic information is for the City. Additional comparisons are made with the County and the State. Population The following table reflects population trends for the City, the County and the State. Population Comparison(]) Note: (1) Source: U.S. Bureau of the Census The Percent The Percent The Percent Year City Change County Change State Change 1970 ..................... 46,850 n/a 72,127 We 2,824,376 n/a 1980 ..................... 50,508 7.81% 61,717 13.30% 2,913,808 3.17% 1990 ..................... 59,735 18.27% 96,119 17.62% 2,776,755 (4.70%) 2000 ..................... 62,220 4.16% 111,006 15.49% 2,926,324 5.39% 2010 ..................... 67,862 9.07% 130,882 17.91% 3,046,355 4.10% Note: (1) Source: U.S. Bureau of the Census City oflowa City, Johnson County, lorva $9,765.000* General Obligation Bonds, Series 2017A Employment Following are lists of large employers located in the City. Major City Employers(]) Name Product/Service Universityof Iowa...................................................................... Education................................................................... University of Iowa Hospitals.......................................................Healthcare.................................................................. 1.30°/ Iowa City Community School District ......................................... Education................................................................... Veteran's Affairs Medical Center ................................................ Health Services.......................................................... MercyHospital........................................................................... Health Services......................................................... Pearson Educational Measurement ....................................:...... Educational Testing Services...................................... Hy-Vee(3).................................................................................. Grocery...................................................................... ACT, Inc.................................................................................... Education Programs.................................................. Cityof Iowa City ........................................................................ Government............................................................... SystemsUnlimited.....................................................................Assisted Living........................................................... International Automotive Components.......................................Auto Interior Components.......................................... Procter & Gamble...................................................................... Health and Beauty Products ...................................... Oral B Laboratories...................................................................Toothbrush Manufacturer........................................... Johnson County Administration.................................................Government............................................................... 4,138 Alpla of Iowa.............................................................................. Plastic Bottle Manufacturer........................................ United Natural Foods.................................................................Organic Food Distribution.......................................... Notes: (1) Source: The Iowa City Area Development Group website. (2) Number of employees includes all full-time, part-time and seasonal employees. (3) Number of employees includes locations in Iowa City and Coralville. Approximate Employment(2) ...................... 18,650 ...................... 8,705 ...................... 2,345 ...................... 11560 .........I ............. 1,560 ...................... 1,145 ....................... 1,165 ....................... 1,090 ....................... 975 ....................... 890 ....................... 785 ....................... 590 ....................... 460 ....................... 435 ....................... 360 ....................... 340 The following tables show employment by industry and by occupation for the City, the County and the State as reported by the U.S. Census Bureau 2011 - 2015 American Community Survey 5 -year estimated values. Employment By Industry(]) Classification Agriculture, forestry, fishing and hunting, and mining ........................... Construction........................................................................................ Manufacturing...................................................................................... Wholesaletrade.................................................................................. Retailtrade.......................................................................................... Transportation and warehousing, and utilities ...................................... Information.......................................................................................... Finance and insurance, and real estate and rental and leasing............ Professional, scientific, and management, and administrative and waste management services....................................................... Educational services, and health care and social assistance ............... Arts, entertainment, and recreation, and accommodation and food services............................................................................... Other services, except public administration ........................................ Public administration........................................................................... Total................................................................................................. The City Number Percent 159 0.40% 1,287 3.20% 2,783 6.90% 495 1.20% 3,576 8.90% 988 2.50% 731 1.80% 11585 3.90% 3,226 8.00% 18,100 45.00% 5,383 13.40% 1,318 3.30% 616 1.50% 40,247 _009/6 The County Number Percent 1,053 1.30°/ 3,230 4.10% 6,455 8.20% 1,343 1.70% 7,310 9.30% 2,494 3.20° 1,405 1.80% 4,252 5.40% 6,348 8.10% 32,037 40.60% 8,375 10.60% 2,754 3.50% 11182 2.30% 78,838 100.00% Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5 -Year Estimates from 2011 - 2015. Employment By Occupation(]) Number Percent 61,617 The City The County Classification Number Percent Number Percent Management, business, science, and arts occupations ....................... 18,511 46.00% 35,838 45.50 Service occupations............................................................................ 8,335 20.70% 14,205 18.00% Sales and office occupations............................................................... 7,775 19.30% 16,467 20.90% Natural resources, construction, and maintenance occupations........... 1,544 3.80% 4,138 5.20% Production, transportation, and material moving occupations .............. 4 082 10.10°/ 8,19 10.400/ Total.................................................................................................. 40,247 100.00% 78,838 100.00% Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5 -Year Estimates from 2011 - 2015 The State Number Percent 61,617 3.90% 97,457 6.20% 239,613 15.20° 44,824 2.80% 184,108 11.70% 72,148 4.60% 27,694 1.80% 117,133 7.40° 112,752 7.20% 382,209 24.30% 117,422 7.50% 66,559 4.20% 49.974 3.20° 1,573,510 100.00% The State Number Percent 542,576 34.50% 261,689 16.60% 367,136 23.30% 147,292 9.40% 254.817 16.20% 1,573,510 100.00% City oflowa City, Johnson County, Iowa $9.765.000* General Obligation Bonds, Series 2017A States. The following shows the annual average unemployment rates for the City, the County, the State and the United Annual Average Unemployment Rates(1)(2) Calendar The The The United Year City County State States 2012 ........................ 3.5% 3.7% 5.1% 8.1% 2013 ........................ 3.3% 3.4% 4.7% 7.4% 2014 ........................ 3.0% 3.0% 4.2% 6.2% 2015 ........................ 2.5% 2.6% 3.7% 5.3% 2016 ........................ 2.8% 2.6% 3.5% 4.7% Notes: (1) Source: Iowa Workforce Development and U.S. Bureau of Labor Statistics. (2) Not seasonally adjusted. Building Permits City Building Permits(1) (Excludes the Value of Land) Calendar Year: 2012 2013 2014 2015 2016 2017(2) New Construction No. of New Permits .............................. 225 248 250 184 262 25 Valuation: ............................................ $ 95,292,497 $151,138,166 $124,416,182 $106,350,572 $295,339,497 $12,473,596 Remodeling Repair and Additions No. of New Permits: ............................. 491 467 453 461 532 87 Valuation: ............................................ $ 73,944,194 $ 33,738,686 $ 28,163,030 $ 31,960,941 $ 93,087,526 $ 7,665,796 Total Permits ....................................... 716 715 703 645 794 112 Total Valuations ................................... $169,236,691 $184,876,852 $152,579,212 $138,311,513 $368,427,023 $ 20,139,392 Notes: (1) Source: the City. (2) As of February, 2017. Housing The U.S. Census Bureau 5 -year estimated values reported that the median value of the City's owner -occupied homes was $186,100. This compares to $193,600 for the County and $129,200 for the State. The following table represents the five year average market value of specified owner -occupied units for the City, the County and the State at the time of the 2011 - 2015 American Community Survey. Value Less than $50,000....... $50,000 to $99,999...... $100,000 to $149,999.. $150,000 to $199,999.. $200,000 to $299,999.. $300,000 to $499,999.. $500,000 to $999,999.. $1,000,000 or more..... TOTAL ....................... Home Values(1) The City County Number Percent 1,043 7.50% 722 5.20% 2,481 17.90% 3,638 26.30% 3,704 26.80% 1,763 12.70% 431 3.10% 46 0.30% 13,828 100.00% The County Number Percent 3,350 10.20% 2,008 6.10% 4,887 14.80% 7,107 21.60% 8,552 25.90% 5,288 16.00% 1,406 4.30% 375 1.10% 32,973 100.00% The State Number Percent 99,287 11.20% 216,328 24.50% 201,698 22.80% 151,787 17.20% 135,180 15.30% 59,446 6.70% 15,485 1.80% 4597 0.50% 883,808 100.00% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 - 2015. 7 City of Iowa City, Johnson County, Iowa $9,765,000* General Obligation Bonds, Series 2017A Mortoaoe Status Housing units with a mortgage........... Housing units without a mortgage...... Total................................................ Mortgage Status(]) The Cit Number Percent 9,346 67.60% 4482 32.40% 13,828 100.00% The County Number Percent 22,845 69.30% 10_,128 30.70% 32,973 100.00% The State Number Percent 541,161 61.20% 342447 38.80% 883,808 100.00% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 - 2015. Income The U.S. Census Bureau 5 -year estimated values reported that the City had a median family income of $75,104. This compares to $83,245 for the County and $67,466 for the State. The following table represents the distribution of family incomes for the City, the County and the State at the time of the 2011 - 2015 American Community Survey. Income Less than $10,000 ............... $10,000 to $14,999 .............. $15,000 to $24,999 .............. $25,000 to $34,999 .............. $35,000 to $49,999 .............. $50,000 to $74,999 .............. $75,000 to $99,999 .............. $100,000 to $149,999.......... $150,000 to $199,999.......... $200,000 or more ................ Total......- ......................... Family Income(]) The City County Number Percent 704 5.409/0 465 3.60% 751 5.80% 704 5.40% 1,755 13.50% 2,086 16.10% 1,913 14.80% 2,450 18.90% 984 7.60% 147 8.90% 12,959 100.00% The County Number Percent 1,0193.30°/ 63,657 647 2.10% 1,348 4.40% 1,576 5.20% 3,422 11.20% 5,113 16.70% 5,610 18.40% 6,531 21.40% 2,642 8.60% 2.663 8.70% 30,571 100.00% The State Number Percent 26,913 3.40% 18,627 2.30% 51,011 6.40% 66,927 8.40% 107,269 13.50% 177,374 22.20% 137,743 17.30% 135,257 17.00% 41,758 5.20% 34 602 4.30% 797,481 100.00% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 to 2015. The U.S. Census Bureau 5 -year estimated values reported that the City had a median household income of $42,375. This compares to $55,700 for the County and $53,183 for the State. The following table represents the distribution of household incomes for the City, the County and the State at the time of the 2011 - 2015 American Community Survey. Agriculture Income Less than $10,000 ................... $10,000 to $14,999 .................. $15,000 to $24,999 .................. $25,000 to $34,999 .................. $35,000 to $49,999 .................. $50,000 to $74,999 .................. $75,000 to $99,999 .................. $100,000 to $149,999 .............. $150,000 to $199,999 .............. $200,000 or more .................... Total..................................... Household Income(]) The City Number Percent 4,047 24.20% 2,202 13.20% 3,348 20.00% 2,657 15.90% 3,964 23.70% 3,991 23.80% 3,140 18.80% 3,133 18.70% 1,126 6.70% 1377 8.20% 28,985 173.10% The County Number Percent 5,363 32.009/6 2,792 16.70% 5,186 31.00% 4,877 29.10% 6,995 41.80% 8,713 52.00% 7,683 45.90% 7,766 46.40% 2,890 17.30% 3161 18.90% 55,426 331.10% The State Number Percent 76,474 6.20% 63,657 5.10% 129,499 10.50% 131,466 10.60% 178,302 14.40% 247,858 20.00% 168,910 13.70% 154,870 12.50% 46,153 3.70% 39.220 3.20°/ 1,236,409 100.00% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 - 2015. Shown below is information on the agricultural value of the County and the statewide average. Average Value Per Acre(]) 2012 2013 2014 2015 2016 Average Value Per Acre: Johnson County ........................................ $8,774 $9,763 $9,758 $9,114 $8,636 The State ................................................... 8,296 8,716 7,943 7,633 7,183 Note: (1) Source: Cooperative Extension Service - Iowa State University. City oflowa City, Johnson County, Iowa $9,765,000' General Obligation Bonds, Series 2017A Retail Sales The Department of Revenue of the State of Iowa provides retail sales figures based on sales tax reports for years ending June 30. The Department of Revenue figures provide recent data to confirm trends in retail sales activity in the City. The City does not receive any local option sales tax. Retail Taxable Sales(]) Fiscal Year Taxable Annual Percent Ending June 30 Sales Change + H 2007(2) ......................... $934,971,428 3.72%(3) 2008(2) .......................... 958,509,729 2.52% 2009 ............................. 905,139,461 (5.57%) 2010 ............................. 725,329,723 (19.87%) 2011 ............................. 741,407,021 2.22% 2012 ............................. 767,122,555 3.47% 2013 ............................. 793,201,342 3.40% 2014 ............................. 811,039,164 2.25% 2015 ............................. 838,853,686 3.43% 2016 ............................. 853,258,347 1.72% Growth from 2007 to 2016 ............................................. (8.74%) Notes: (1) Source: the Iowa Department of Revenue. (2) Fiscal years 2007 and 2008 amounts reflect a year ending March 31st. (3) Percentage change based on 2006 Taxable Sales amount of $901,481,066. THE PROJECT Bond proceeds will be used to: (i) finance the cost of various essential and general corporate purpose capital improvements; (ii) finance the costs of aiding in the planning, undertaking and carrying out of urban renewal projects (together with the improvements described in (i), the "Project"); and (iii) pay the costs of issuance of the Bonds. More specifically, the Project includes the financing of the costs of aiding in the planning, undertaking, and carrying out of urban renewal projects under the authority of chapter 403, including improvements to the Riverfront Crossings District of the City -University Urban Renewal Area; opening, widening, extending, grading, and draining of the right-of- way of streets, highways, avenues, alleys, bridges and public grounds; the construction, reconstruction, and repairing of any street improvements; the acquisition, installation, and repair of sidewalks, and pedestrian underpasses and overpasses, storm sewers, sanitary sewers, water service lines, street lighting, and traffic control devices, and the acquisition of any real estate needed for any of the foregoing purposes; improvement of parks already owned, including the removal, replacement and planting of trees in the parks, and facilities, equipment, and improvements commonly found in city parks; acquisition, construction, reconstruction, and improvement of all waterways, and real and personal property, useful for the protection or reclamation of property situated within the corporate limits of cities from floods or high waters, and for the protection of property in cities from the effects of flood waters, the construction of levees, embankments, structures, impounding reservoirs, or conduits, and the establishment, improvement, and widening of streets, avenues, boulevards, and alleys across and adjacent to the project, as well as the development and beautification of the banks and other areas adjacent to flood control improvements; acquisition, construction, reconstruction, enlargement, improvement, and equipping of recreation grounds, trails, recreation buildings, juvenile playgrounds, recreation centers and parks, including a park on Lower West Branch Road and the re -development of Hickory Hill Park; acquisition, construction, reconstruction, enlargement, improvement, and equipping of recreation grounds, recreation buildings, juvenile playgrounds, and parks, including the development of Riverfront Crossings Park on the site of the former wastewater plant; acquisition, construction, reconstruction, enlargement, improvement, and equipping of community center houses, recreation buildings, swimming pools, and recreation centers; acquisition, construction, reconstruction, improvement, and equipping of various city and not- for-profit buildings; and designing, constructing, furnishing and equipping portions of a new public works building. City oflowa City, Johnson County, Iowa $$765,000* General Obligation Bonds, Series 2017A DEBT INFORMATION After issuance of the Bonds, the City will have outstanding $51,645,000* principal amount of general obligation debt. In addition, the City has outstanding approximately $15,200,000 principal amount of debt paid from net revenues of the City's Urban Renewal areas; $14,482,714 principal amount of debt paid from the net revenues of the Municipal Parking System; $13,045,000 principal amount of debt paid from net revenues of the Municipal Water System; and $20,285,000 principal amount of debt paid from net revenues of the Municipal Sewer System. The City does not expect to issue any additional general obligation debt in calendar year 2017. Concurrently with the issuance of the Bonds, the City will be issuing $5,235,000* in Sewer Revenue Refunding Capital Loan Notes, which will currently refund the City's outstanding Sewer Revenue Refunding Capital Loan Notes, Series 2009A and $5,910,000* in Water Revenue Capital Loan Notes, which will currently refunding the City's outstanding Water Revenue Capital Loan Notes, Series 2009B and provide funds for water system capital projects. 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 2015 valuation currently applicable to the Fiscal Year 2016-17 is as follows: 2015 Actual Valuation of Property Legal Debt Limit of 5% ................. Legal Debt Limit ........................... $5,350,227,854 0.05 $ 267,511,393 Less: TIF Revenue Debt Subject to Debt Limit ...................... (15,200,000) Less: Total G.O. Debt Subject to Debt Limit .......................... (51,645,000) Less: Other Loans................................................................. (1,064.000) Less: TIF Rebate Agreements...............................................(13.506.152) Net Debt Limit....................................................................... $ 186,096,241 DIRECT DEBT Summary of General Obligation and Tax Increment Debt(]) (Principal Only) General Obligation: Series 20108 ....................................................... Series 2011A ....................................................... Series 2011 C ...................................................... Series 2012A ....................................................... Series 2013A ....................................................... Series2014 ......................................................... Series2015 ......................................................... Series 2016A ....................................................... TheBonds(2)...................................................... Total General Obligation(2).............................. $ 2,370,000 3,080,000 5,055,000 4,760,000 4,975,000 6,685,000 6,360,000 8,555,000 9.765.000 $51,645,000 Tax Increment Financing Revenue: Series 2012D ...................................................... $ 2,395,000 Series 2016E ....................................................... 12.805.000 Total Tax Increment ......................................... $15,200,000 Notes: (1) Source: the City. (2) Subject to change. *Subject to change. 10 City oflmva City, Johnson County, 7mva $9,765,000" General Obligation Bonds, Series 2017A General Obligation Debt(1)(2) (Principal Only) Fiscal Year Ending Series Series Series Series Series Series Series Series June 30 20108 2011A 2011C 2012A 2013A 2014 2015 2016A 2018 ........................................... $ 765,000 $ 885,000 $ 1,205,000 $ 915,000 $ 790,000 $ 900,000 $ 725,000 $ 875,000 2019 ........................................... 790,000 910,000 1,240,000 930,000 805,000 910,000 740,000 895,000 2020 ........................................... 815,000 940,000 1,280,000 955,000 820,000 925,000 765,000 910,000 2021 ........................................... 0 345,000 1,330,000 975,000 835,000 950,000 785,000 930,000 2022 ........................................... 0 0 0 1,005,000 855,000 970,000 805,000 950,000 2023- ........................................ 0 0 0 0 870,000 1,000,000 830,000 965,000 2024 ........................................... 0 0 0 0 0 1,030,000 850,000 985,000 2025 ........................................... 0 0 0 0 0 0 880,000 1,010,000 2026 ........................................... 0 0 0 0 0 0 0 1,035,000 2027 ........................................... 0 0 0 0 0 0 0 0 Total ......................................... $2,370,000 $3,080,000 $5,055,000 $4,780,000 $4,975,000 $6,685,000 $6,380,000 $8,555,000 Fiscal Year Outstanding Total Total Ending General Obligation The General Obligation Cumulative Retirement(3) Principal & June 30 Debt Bonds(3) Debt(3) Amount Percent Interest(3) 2018 ........................................... $ 7,060,000 $ 900,000 $ 7,960,000 $ 7,960,000 15.41% $9,171,880 2019 ........................................... 7,220,000 905,000 8,125,000 16,085,000 31.15% 9,189,028 2020 ........................................... 7,410,000 920,000 8,330,000 24,415,000 47.27% 9,194,712 2021 ........................................... 6,150,000 940,000 7,090,000 31,505,000 61.00% 7,742,760 2022 ........................................... 4,585,000 955,000 5,540,000 37,045,000 71.73% 4,993,200 2023 ................ ................ 6 .... 6 ... ,. 3,665,000 980,000 4,645,000 41,690,000 80.72% 4,113,713 2024 ............................................ 2,865,000 1,000,000 3,865,000 45,555,000 88.21% 3,058,493 2025 ........................................... 1,890,000 1,025,000 2,915,000 48,470,000 93.85% 2,166,193 2026 ........................................... 1,035,000 1,055,000 2,090,000 50,560,000 97.90% 2,173,318 2027 ...............................6.6....6.6.. 0 1.085000 1.085,000 51,645,000 100.00% 1,117,550 Total ......................................... $41,880,000 $9,765,000 $51,645,000 Notes: (1) Source: the City. (2) Does not include the June 1, 2017 principal payments on the outstanding debt or the redemption of the outstanding 2009C bonds on June 1, 2017. (3) Subject to change. The remainder ofthis page was left blank intentionally. 11 City oflowa City, Johnson County, Iowa $9,765,000* General Obligation Bonds, Series 2017A Statement of Bonded Indebtedness(I)(2) CityActual Value, January 1, 2015............................................................................................................................................................. Multi- Ag Land Fiscal Year $5,350,227.854 CityTaxable Value, January 1, 2015.......................................................................................................................................................... 8 Buildings Commercial 2008109 ................ 44.0803% N/A $3,421.386,133 99.7312% 2009/10 ................ 45.5893% N/A 93.8568% 100.0000% Per Capita 46.9094% N/A Applicable 100.0000% Ratio to City Ratio to City (2010 Pop. 69.0152% Total Percent Amount Actual Value Taxable Value 67.862) General Obligation Bonded Debt(3).....................$51,645,000 52.8166% 100.00% $51,645,000 0.97% 1.51% $ 761.03 TIF Revenue Debt .............................. -............... 15,200,000 100.00% 15,200,000 0.28% 0.44% 223.98 Overlapping Debt: 2016/17 ................ 55.6259% 86.2500% 46.1068% 90.0000% 2017/18 ................ Iowa City Community School District ................... $14,150,000 57.23% $ 8,098,045 0.15% 0.24% $ 119.33 Clear Creek-Amana Community School District... 61,465,000 0.04% 24,586 0.00% 0.00% 0.36 Kirkwood Community College(4)......................... 94,574,427 14.17% 13,401,196 0.25% 0.39% 197.48 Johnson County .................................................. 8,490,000 42.54% 3,611.646 0.07% 0.11°/ 53.22 Total Overlapping Bonded Debt................................................................. $25.135.473 0.47% 0.74% 370.39 Total Direct and Overlapping Bonded Debt(3)........................................... $91,980,473 1.72°/ 2.69% $1,355.40 PerCapita Actual Value................................................................................................................................................................................ $78,839.82 PerCapita Taxable Value.............................................................................................................................................................................. $50,416.82 Notes: (1) Source: the City, Audited Financial Statements and EMMA for the County, School Districts and Community College. (2) As of the date of issuance for the Direct Bonded Debt and March 29, 2017 for Overlapping Debt. (3) Subject to change. (4) Excludes $37,880,000 in Industrial New Jobs Training Certificates, which are retired by proceeds from anticipated job credits from withholding taxes. PROPERTY ASSESSMENT AND TAX INFORMATION Property Tax Assessment In compliance with Section 441.21 of the Code of Iowa, as amended, the State Director of Revenue annually directs all county auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The final values, called Actual Valuation, are then adjusted by the County Auditor. Taxable Valuation subject to tax levy is then determined by the application of State determined rollback percentages, principally to residential property. Beginning in 1978, the State required a reduction in Actual Valuation to reduce the impact of inflation on its residents. The resulting value is defined as the Taxable Valuation. Such rollback percentages may be changed in future years. Certain historical rollback percentages for residential, multi -residential, agricultural and commercial valuations are as follows: Percentages for Taxable Valuation After Rollbacks(]) Property is assessed on a calendar year basis. The assessments finalized as of January 1 of each year are applied to the following tax year. For example, the assessments finalized on January 1, 2015, are used to calculate tax liability for the tax year starting July 1, 2016 through June 30, 2017. 12 Multi- Ag Land Fiscal Year Residential Residential(2) 8 Buildings Commercial 2008109 ................ 44.0803% N/A 90.1023% 99.7312% 2009/10 ................ 45.5893% N/A 93.8568% 100.0000% 2010111 ................ 46.9094% N/A 66.2715% 100.0000% 2011/12 ................ 48.5299% N/A 69.0152% 100.0000% 2012/13 ................ 50.7518% N/A 57.5411% 100.0000% 2013/14.. i............ 52.8166% NIA 59.9334% 100.0000% 2014/15 ................ 54.4002% NIA 43.3997% 95.0000% 2015/16 ................ 55.7335% N/A 44.7021% 90.0000% 2016/17 ................ 55.6259% 86.2500% 46.1068% 90.0000% 2017/18 ................ 56.9391% 82.5000% 47.4996% 90.0000% Notes: (1) Source: the Iowa Department of Revenue. (2) New category beginning with fiscal year 2017. Property is assessed on a calendar year basis. The assessments finalized as of January 1 of each year are applied to the following tax year. For example, the assessments finalized on January 1, 2015, are used to calculate tax liability for the tax year starting July 1, 2016 through June 30, 2017. 12 City oflmva City, Johnson County, Iowa $9,765,000- General Obligation Bonds, Series 2017A Property Tax Collection Each county is required by State law to collect all tax levies within its jurisdiction and remit, before the fifteenth of each month, the amount collected through the last day of the preceding month to underlying units of government, including the City. Property tax payments are made at the office of each county treasurer in full or one-half by September 30 and March 31, pursuant to the Code of Iowa, Sections 445.36 and 445.37. Where the first half of any property tax has not been paid by October 1, such installment becomes delinquent. If the second installment is not paid, it becomes delinquent on April 1. Delinquent taxes and special assessments are subject to a penalty at the rate of one and one-half percent per month, to a maximum of eighteen percent per annum. If taxes are not paid when due, the property may be offered at the regular tax sale on the third Tuesday 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 the payment of taxes. A property owner may redeem from the regular tax sale, but failing redemption within two years, the tax sale purchaser is entitled to a deed which in general conveys the title free and clear of all liens except future installments of taxes. Property Valuations and Trend of Valuations Actual (100%) Valuations for the City(1)(2) Fiscal Year: 2012/13 2013/14 2014/15 2015/16 2016/17 Property Class Levy Year: 2011 2012 2013 2014 2015 Residential........................................................ $3,285,609,160 $3,371,854,560 $3,495,700,460 $3,617,590,930 $3,893,541,900 Agricultural........................................................ 2,516,440 2,655,640 3,680,920 3,553,520 3,720,671 Commercial....................................................... 1,155,433,460 1,118,453,910 1,157,640,090 1,155,761,766 856,972,664 Industrial........................................................... 77,855,500 77,291,810 80,494,880 76,495,918 79,053,598 Multi-residential(3)............................................. 0 0 0 0 415,208,021 Railroads........................................................... 2,619,932 3,205,451 3,827,506 4,015,580 4,096,577 Utilities without Gas & Electric(4)....................... 11,051,685 10,816,940 9,599,528 8,239,789 7,375,066 Gas & Electric Utility(4)...................................... 83,538,109 87,100,183 78,642,915 87,728,294 92,987,351 Less: Military Exemption ................................. (3.096.542) (3.059.5021 (2.939.1221 (2.828.002) (2.727.994) Total Valuation with TIF ..................................... $4,615,527,744 $4,668,318,992 $4,826,647,177 $4,950,557,795 $5,350,227,854 Percent Change ................................................ 2.11%(5) 1.14% 3.39% 2.57% 8.07% Notes: (1) Source: Iowa Department of Management. (2) Includes tax increment finance (TIF) valuations used in the following amounts: January 1: 2011 2012 2013 2014 2015 TI F Valuation (included above).... $11,712,327 $14,113,908 $21,131,574 $42,307,287 $72,650,838 (3) New Class as of January 1, 2015, previously reported as Commercial Property. (4) See "PROPERTY TAX INFORMATION - Utility Property Tax Replacement" herein. (5) Based on 2010 Actual Valuation of $4,520,142,100. The remainder of this page was left blank intentionally. 13 City oflowa City, Johnson County, Iowa $9,765,000- General Obligation Bonds, Series 2017A For the January 1, 2015 levy year, the City's Taxable Valuation was comprised of approximately 63% residential, 23% commercial, 10% multi -residential, 2% industrial, 2% utilities and less than 1% agriculture and military exemption. Property Valuations and Trend of Valuations Taxable ("Rollback") Valuations for the City(1)(2) Fiscal Year: 2012/13 2013/14 2014/15 2015/16 2016/17 Property Class Levy Year: 2011 2012 2013 2014 2015 Residential........................................................ $1,667,396,105 $1,780,898,909 $1,901,667,703 $2,016,210,314 $2,165,817,742 Agricultural........................................................ 1,447,988 1,591,636 1,597,501 1,588,496 1,706,955 Commercial....................................................... 1,155,433,460 1,118,453,910 1,099,758,752 1,040,185,590 771,275,414 Industrial........................................................... 77,855,500 77,291,810 76,470,143 68,846,326 71,148,238 Multi-residential(3)............................................. 0 0 0 0 358,117,010 Railroads........................................................... 2,619,932 3,205,451 3,636,130 3,614,022 3,686,919 Utilities without Gas & Electric(4) ....................... 11,051,685 10,816,940 9,599,528 8,239,789 7,375,066 Gas & Electric Utility(4)...................................... 47,404,050 46,813,214 47,004,994 46,785,426 44,986,783 Less: Military Exemption ................................. (3,096.542) (3.059.502) (2,939.122) (2,828.002) (2,727,994) Total Valuation with TIF ..................................... $2,960,112,178 $3,036,012,368 $3,136,795,629 $3,182,641,961 $3,421,386,133 Percent Change ................................................ 3.93%(5) 2.56% 3.32% 1.46% 7.50% Notes: (1) Source: Iowa Department of Management. (2) Includes tax increment finance (TIF) valuations used in the following amounts: January 1: 2011 2012 2013 2014 2015 TIF Valuation (included above).... $11,712,327 $14,113,908 $21,131,574 $33,331,128 $72,650,838 (3) New Class as of January 1, 2015, previously reported as Commercial Property. (4) See "PROPERTY TAX INFORMATION - Utility Property Tax Replacement" herein. (5) Based on 2010 Taxable Valuation of $2,848,162,606. The following shows the trend in the City's tax levies and collections. Levies and Tax Collections(]) Levy Fiscal Amount Amount Percent Year Year Levied Collected(2) Collected 2010 ............... 2011-12.............. $49,589,988 $49,543,860 99.91% 2011 ............... 2012-13 .............. 50,407,375 50,419,618 100.02% 2012 ............... 2013-14 .............. 50,307,189 50,051,577 99.49% 2013 ............... 2014-15.............. 51,608,730 51,496,353 97.70% 2014 ............... 2015-16.............. 52,033,966 52,020,805 99.97% 2015 ............... 2016-17.............. 55,330,223 -- In Collection -- Notes: (1) Source: the State of Iowa Department of Management and the City. Does not include Levies or Collections for Utility Replacement. (2) Includes delinquent taxes. Larger Taxpayers(]) Notes: (1) Source: the County. (2) Every effort has been made to seek out and report the largest taxpayers. However, many of the taxpayers listed contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. The 2015 taxable is the most current available. 14 Levy Year 2015 Taxpayer Name Business/Service Taxable Valuation(2) ACTInc.........................................................................Commercial................................................................. $ 47,639,112 MldAmerican Energy.....................................................Utility........................................................................... 42,663,621 Ann S. Gerdin Revocable Trust ..................................... Commercial................................................................. 22,803,280 Dealer Properties IC LLC ............................................... Commercial................................................................. 18,888,867 Procter & Gamble Hair Care LLC...................................Industrial...................................................................... 16,414,333 Christian Retirement Services Inc .................................. Retirement................................................................... 15,576,959 MidWestOneBank ......................................................... Banking....................................................................... 15,014,313 Vesper Iowa City LLC....................................................Apartments.................................................................. 14,026,869 AlplaInc........................................................................Industrial...................................................................... 13,860,000 National Computer Systems Inc ..................................... Commercial................................................................. 12.814.893 Total................................................................................................................................................................. $219,702,247 Ten Largest Taxpayers as Percent of City's 2015 Taxable Valuation ($3,421,386,133) .................................... 6.42% Notes: (1) Source: the County. (2) Every effort has been made to seek out and report the largest taxpayers. However, many of the taxpayers listed contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. The 2015 taxable is the most current available. 14 City of Iowa City, Johnson Couno; Iowa $9,765,000* General Obligation Bonds, Series 2017A Levy Limits A city's general fund tax levy is limited to $8.10 per $1,000 of taxable value, with provision for an additional $0.27 per $1,000 levy for an emergency fund which can be used for general fund purposes (Code of Iowa, Chapter 384, Division I). Cities may exceed the $8.10 limitation upon authorization by a special levy election. Further, there are limited special purpose levies which may be certified outside of the above described levy limits (Code of Iowa, Section 384.12). The amount of the City general fund levy subject to the $8.10 limitation is $8.10 for Fiscal Year 2016-17. The City does levy costs for operation and maintenance of publicly owned Transit, tort liability and other insurance, support of the public library, police and fire retirement, FICA and TPERS and other employee benefits expenses in addition to the $8.10 general fund limit as authorized by law. In addition, the City has not established an emergency fund levy for Fiscal Year 2016-17. Debt service levies are not limited. The property tax rates for the City from levy year 2011 through levy year 2015 are shown below: 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 property valuation within the City. As part of the budgetary process 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 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 of the Bonds for a particular fiscal year may cause Bond holders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. Notwithstanding the foregoing, Iowa Code section 76.2 provides when an Iowa political subdivision issues bonds, "the governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditor(s) to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full." 15 Tax Rates Levy Years 2011- 2015(1)(2) (Per $1,000 Actual Valuation) Fiscal Year: 2012/13 2013114 2014/15 2015/16 2016/17 Levy Year: 2011 2012 2013 2014 2015 The City: General Fund ..................................................... $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 $ 8.10000 Emergency Levy ................................................. 0.00000 0.00000 0.00000 0.00000 0.00000 Debt Service Fund .............................................. 4.44287 4.02965 4.12963 3.92833 3.82846 Employee Benefits ............................................. 3.19286 3.16331 2.96331 3.11277 3.14415 Capital Improvement .......................................... 0.00000 0.00000 0.00000 0.00000 0.00000 Others................................................................ 1.53291 1.51226 1.51226 1.50986 1.51044 Total City Rate .................................................. $17.26864 $16.80522 $16.70520 $16.65096 $16.58305 Others: Johnson County ................................................. $ 6.74909 $ 6.73712 $ 6.74168 $ 6.90337 $ 6.77140 Iowa City School District ..................................... 14.07327 13.68792 13.69999 13.86773 13.98935 Kirkwood Community College District ................. 1.07888 1.06473 1.05754 1.06125 1.08048 Other.................................................................. 0.32929 0.34363 0.32315 0.32784 0.32450 Total Rate Paid by City Residents .................... $39.49917 $38.63862 $38.52756 $38.81115 $38.74878 Notes: (1) Source: Iowa Department of Management. (2) Does not include the tax rete for agriculture. 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 property valuation within the City. As part of the budgetary process 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 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 of the Bonds for a particular fiscal year may cause Bond holders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. Notwithstanding the foregoing, Iowa Code section 76.2 provides when an Iowa political subdivision issues bonds, "the governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditor(s) to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full." 15 City ofhowa City, Johnson County, Iowa $9,765,000' General Obligation Bonds, Series 2017A Utility Property Tax Replacement Property owned by entities involved primarily in the production, delivery, service and sale of electricity and natural gas ("Utilities") pay a replacement tax based upon the delivery of energy by Utilities in lieu of property taxes. All replacement taxes are allocated among local taxing bodies by the State Department of Revenue and the Department of Management. This allocation is made in accordance with a general allocation formula developed by the Department of Management on the basis of general property tax equivalents. Utility properties paying the replacement tax are exempt from the levy of property tax by political subdivisions. In addition to the replacement tax, Utility property will continue to be valued by a special method as provided in the statute and taxed at the rate of three cents per one thousand dollars for the general fund of the State. By statute, the replacement tax collected by the State and allocated among local taxing bodies (including the City) shall be treated as property tax when received and shall be disposed of by the county treasurer as taxes on real estate. It is possible that the general obligation debt capacity of the City could be adjudicated to be proportionately reduced in future years if Utility property were determined to be other than "taxable property" for purposes of computing the City's debt limit under Article XI of the Constitution of the State of Iowa. There can be no assurance that future legislation will not (i) operate to reduce the amount of debt the City can issue or (ii) adversely affect the City's ability to levy taxes in the future for the payment of the principal of and interest on its outstanding debt obligations, including the Bonds. Approximately 2% of the City's taxable valuation currently is utility property. Tax Increment Financing The Code of Iowa currently authorizes the use of two types of tax increment financing by local taxing districts in the State of Iowa. The first type allows local governments to establish TIF districts to be established for the purposes of financing designated urban renewal projects which contribute to the urban redevelopment and economic development of the immediate area. The taxable valuation for this type of TIF district in the City for levy year 2015 was $72,650,838. Legislation From time to time, legislative proposals are pending in Congress and the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described herein. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for taxes levied by the City or have an adverse impact on the future tax collections of the City. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed federal or state tax legislation. The opinions expressed by Bond Counsel are based upon existing legislation as of the date of issuance and delivery of the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending federal or state tax legislation. During the 2013 legislative session, the Iowa General Assembly enacted Senate File 295 (the "Act"), which the Governor signed into law on June 12, 2013. Among other things, the Act (i) reduces the maximum annual taxable value growth percent, due to revaluation of existing residential and agricultural property to 3%, (ii) assigns a "rollback" (the percentage of a property's value that is subject to tax) to commercial, industrial and railroad property of 90%, (iii) creates a new property tax classification for multi -residential properties (apartments, nursing homes, assisted living facilities and certain other rental property) and assigns a declining rollback percentage to such properties for each year until the residential rollback percentage is reached in the 2022 assessment year, after which the rollback percentage for such properties will be equal to the residential rollback percentage each assessment year, and (iv) exempts a specified portion of the assessed value of telecommunication properties. 16 City oflowa City, Johnson Cowtty, Iowa $9,765,000' General Obligation Bonds, Series 2017A The Act includes a standing appropriation to replace some of the tax revenues lost by local governments, including tax increment districts, resulting from the new rollback for commercial and industrial property. Beginning in fiscal year 2018 the standing appropriation cannot exceed the actual 2017 appropriation amount. The appropriation does not replace losses to local governments resulting from the Act's provisions that reduce the annual revaluation growth limit for residential and agricultural properties to 3%, the gradual transition for multi -residential properties from the residential rollback percentage (currently 53% of market value), or the reduction in the percentage of telecommunications property that is subject to taxation. Given the wide scope of the statutory changes, and the State's discretion in establishing the annual replacement amount that is appropriated each year commencing in fiscal 2018, the impact of the Act on the City's future property tax collections is uncertain and the City has not attempted to quantify the financial impact of the Act's provisions on the City's future operations. It has been projected by Moody's Investor Service that local governments in Iowa are likely to experience sizeable reductions in tax revenues collected starting in fiscal 20181. According to Moody's, local governments that may experience disproportionately higher revenue losses include regions that have a substantial commercial base, a large share of multi -residential developments (such as college towns), or significant amounts of telecommunications property. Notwithstanding any decrease in property tax revenues that may result from the Act, Iowa Code section 76.2 provides that when an Iowa political subdivision issues general obligation bonds, "[t]he governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or the auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditors to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full." From time to time, other legislative proposals may be considered by the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described in this Final Official Statement. It cannot be predicted whether or in what forms any of such proposals may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for the levy of taxes by the City. The remainder of this page was left blank intentionally. I US Public Finance Weekly Credit Outlook, May 30, 2013, Moody's Investors Service. 17 City oflowa City. Johnson County, Iowa $$765,000` General Obligation Bonds, Series 2017A FINANCIAL INFORMATION Financial Reports The City's financial statements are audited annually by certified public accountants. The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governments. See APPENDIX A for more detail. No Consent or Updated Information Requested of the Auditor The tables and excerpts (collectively, the "Excerpted Financial Information") contained in this "FINANCIAL INFORMATION" section are from the audited financial statements of the City, including the audited financial statements for the fiscal year ended June 30, 2016 (the "2016 Audit"). The 2016 Audit has been prepared by EideBailly, LLP, Certified Public Accountants, Dubuque, Iowa, (the "Auditor"), and received by the City Council. The City has not requested the Auditor to update information contained in the Excerpted Financial Information and the 2016 Audit; nor has the City requested that the Auditor consent to the use of the Excerpted Financial Information and the 2016 Audit in this Official Statement. The inclusion of the Excerpted Financial Information and the 2016 Audit in this Official Statement in and of itself is not intended to demonstrate the fiscal condition of the City since the date of the 2016 Audit. Questions or inquiries relating to financial information of the City since the date of the 2016 Audit should be directed to the City. Summary Financial Information The following tables are summaries and do not purport to be the complete audits, copies of which are available upon request. See APPENDIX A for the City's 2016 Audit. The City expects its total General Fund balance for the fiscal year ending June 30, 2017 to decrease by approximately $20,438,621; unrestricted General Fund balance to decrease by $1,947,062. The decreases are due in part to transfers of $2,500,000 for the construction of a new public works facility (unrestricted) and $18,262,595 to the gateway project from sales tax monies (restricted). The City has approved a budget for fiscal year 2018 with an increase to its General Fund of approximately $282,000. The remainder of this page was left blank intentionally. 18 City oflowa City, Johnson County, Iowa $9,765,000- General Obligation Bonds, Series 2017A Statement of Net Position Governmental Activities(]) (Amounts Expressed in Thousands) ASSETS: Equity in Pooled Cash and Investments .................................. Receivables: PropertyTax.......................................................................... Accounts and Unbilled Usage ................................................ Interest.................................................................................. Notes..................................................................................... Internal Balances..................................................................... Due from Other Governments .................................................. PrepaidItem............................................................................ Inventories............................................................................... Assets Held for Resale............................................................ Restricted Assets: Equity in Pooled Cash and Investments ................................. Other Post Employment Benefits Asset ................................... Capital Assets: Land and Construction in Progress ........................................ Other Capital Assets (Net of Accumulated Depreciation)......... TotalAssets....................................................................... DEFERRED OUTFLOWS OF RESOURCES:(2) Pension Related Deferred Outflows ..................... LIABILITIES: Accounts Payable.................................................................... Contracts Payable................................................................... Accrued Liabilities................................................................... Interest Payable...................................................................... Deposits.................................................................................. Advances from Grantors.......................................................... Due to Other Governments...................................................... NotesPayable......................................................................... Unearned Revenue................................................................. Noncurrent Liabilities: Due Within One Year: Employee Vested Benefits ................................................... BondsPayable.................................................................... Due in more than One Year: Employee Vested Benefits ................................................... Net Pension Liability ............................................................ Other Post Employment Benefits Obligation ........................ NotesPayable..................................................................... BondsPayable.................................................................... Total Liabilities................................................................... DEFERRED INFLOWS OF RESOURCES:(2) Pension Related Deferred Inflows .................. Succeeding Year Property Taxes ................... Grants............................................................. Total Deferred Inflows of Resources.......... NET POSITION: Net Investment in Capital Assets Restricted for or by: Employee Benefits .................... Capital Projects ........................ Debt Service ............................. Police....................................... Other Purposes ........................ Grant Agreement ...................... Unrestricted ................................ Total Net Position ................. 2012 2013 2014 2015 2016 $ 60,441 $ 63,252 $ 60,279 $ 63,571 $ 84,052 50,754 50,808 51,828 52,240 55,482 430 1,448 530 718 953 179 69 165 364 284 16,624 17,105 17,787 17,308 16,252 (11,938) (11,321) (11,066) (12,127) (13,688) 8,055 9,796 7,410 10,298 5,987 0 0 0 0 10 734 659 597 656 688 11100 703 2,108 2,170 582 45,986 29,601 46,909 45,981 36,914 28 24 23 25 40 37,792 46,058 38,211 48,032 48,275 150.699 136.205 149,443 151,620 158.947 $360,784 $344,407 $364,224 $380,856 $394,778 0 0 0 6,767 7.192 $ 2,593 $ 3,287 $ 2,523 $ 2,296 $ 3,374 1,330 2,689 1,418 5,468 2,773 2,665 2,942 3,964 4,145 4,143 208 156 190 168 110 956 1,021 1,068 1,078 1,715 0 0 29 69 47 2,991 18 36 636 402 805 538 1,943 2,004 582 60,557 61,144 0 0 0 1,226 1,161 1,163 1,148 1,185 11,337 10,347 11,780 11,255 10,384 1,005 950 941 928 947 0 0 0 24,556 30,539 2,086 2,386 2,659 2,932 3,227 211 211 211 211 211 62,889 49.957 54.969 50,785 48,105 $150,859 $136,807 $ 82,894 $107,679 $107,744 ............. $ 0 $ 0 $ 0 $ 10,791 $ 3,740 I............ 0 0 51,609 52,035 55,330 ............. 0 0 11,523 11,422 11,226 ............. 0 0 0 0 12 I............ $ 0 $ 0 $ 63,132 $ 74,248 $ 70,308 ............. $135,998 $133,989 $138,482 $153,729 $163,362 I............ 2,057 2,073 1,713 1,593 1,671 ............. 20,565 13,319 30,692 27,014 31,456 ............. 11,009 6,527 6,718 6,921 6,463 ............. 0 0 529 510 458 ............. 1,390 948 306 409 1,657 ............. 0 0 0 0 449 ............. 38.906 ............. $209,925$248 50.744 7�➢p 39,758 S2_18.198 15.520 9205.695 18.402 918 Notes: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2012-2016. (2) Format change in 2014. 19 City oflmva City, Johnson County, Iowa $9,765, 000* General Obligation Bonds, Series 2017A Statement of Activities Governmental Activities(]) (Amounts Expressed in Thousands) FUNCTIONIPROGRAMS: Governmental Activities: PublicSafety......................................................................... PublicWorks......................................................................... Culture and Recreation.......................................................... Community and Economic Development ............................... General Government............................................................. Interest on Long -Tenn Debt ................................................... Total Governmental Activities .............................................. General Revenues: Property Taxes, Levied for General Purposes ....................... Hotel/Motel Tax..................................................................... Gas and Electric Tax............................................................. Utility Franchise Tax.............................................................. Grants and Contributions Not Restricted to Specific Purposes................................................................. Earnings on Investments........................................................ Gain on Disposal of Capital Assets ........................................ Miscellaneous........................................................................ Transfers................................................................................. Reassignment of Cable Television to Governmental Activities................................................................................ Total General Revenues and Transfers ............................... Changes in Net Position .................................................... Net Position Beginning of Year ................................................ Net Position End of Year ......................................................... Audited Fiscal Year Ended June 30 2011 2012 2013 2014 2015 ($17,206) ($16,496) is 18,609) ($16,991) ($15,969) (11,526) (4,835) (2,901) 8,350 998 (11,378) (12,265) (15,349) (13,208) (13,535) (7,946) (6,178) (7,414) (6,101) (4,322) (4,774) (4,750) (4,657) (4,777) (4,988) 2400 2237 (1.797) 1517) (1.287) ($55,230) ($46,761) ($50,727 ($34,244) ($39,103) $ 50,516 $ 51,017 $ 50,551 $ 52,205 $ 53,114 6,394 6,589 6,745 1,057 1,079 811 872 967 851 764 858 819 780 902 874 8,644 8,858 466 1,048 2,080 822 918 1,031 1,188 1,045 1,823 841 973 135 218 2,950 1,312 1,651 5,518 4,464 4,228 4,390 4,353 (10,057) (6,395) (3,867) 11 0.4851 (6,192) 0 82 73,179 65,131 61,325 52 847 57 325 17,949 18,370 10,598 18,603 18,222 191.976 $203.92fi 189,230 $207,600 207.600 11;918 198 187.093 S2(15-6,0 205.696 $223.918 Note: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2012 - 2016. The remainder of this page was left blank intentionally. go] City oflowa City, Johnson County, Iowa $9.765.000- General Obligation Bonds, Series 2017A Balance Sheet General Fund(]) (Amounts Expressed in Thousands) The remainder of this page was left blank intentionally. 21 Audited as of June 30 2012 2013 2014 2015 2016 ASSETS: Equity in Pooled Cash and Investments .................................... $21,863 $18,744 $19,461 $19,001 $30,214 Receivables: Property Taxes........................................................................ 28,125 28,869 29,610 29,922 31,825 Accounts and Unbilled Usage .................................................. 225 248 281 250 449 Interest.................................................................................... 109 44 100 217 163 Notes....................................................................................... 360 1,139 1,281 1,340 1,305 Advances to Other Funds.......................................................... 341 148 686 2,681 0 Due from Other Governments.................................................... 3,938 3,927 2,112 1,859 1,758 Inventories................................................................................. 244 0 0 0 0 Prepaid Item.............................................................................. 0 0 0 0 10 Assets Held for Resale.............................................................. 170 538 1,943 2,005 582 Restricted Assets: Equity in Pooled Cash and Investments ................................... 24,221 25,788 30 047 3y141 21.27 7 Total Assets....................................................................... $79.59& $Z9. S $85.521 597416 S8 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES: Liabilities: Accounts Payable.................................................................... $ 1,323 $ 1,219 $ 1,251 $ 1,328 $ 1,376 Accrued Liabilities.................................................................... 657 692 823 887 1,141 Advances from Other Funds .................................................... 2,150 0 0 0 0 Due to Other Governments...................................................... 19 15 36 312 29 Interest Payable...................................................................... 0 5 36 37 0 Notes Payable......................................................................... 170 538 1,943 2,004 582 Deferred Revenue................................................................... 30,770 31,423 0 0 0 Liabilities Payable from Restricted Assets: Deposits............................................................................... 950 938 1,030 1,072 1,710 Advances from Grantors....................................................... 0 0 0 27 0 Total Liabilities................................................................... 36 039 34 830 5 119 5 667 4,838 DEFERRED INFLOWS OF RESOURCES:(2) Unavailable Revenues: Succeeding Year Property Taxes .......................................... $ 0 $ 0 $29,486 $29,805 $31,739 Notes..................................................................................... 0 0 1,281 1,340 1,305 Grants................................................................................... 0 0 375 82 15 Other..................................................................................... 0 0 1351 1393 1434 Total Deferred Inflows of Resources .................................... $0 $32,493 $32,620 $34,493 FUND BALANCES: Nonspendable......................................................................... $ 314 $ 69 $ 69 $ 69 $ 69 Restricted................................................................................ 23,779 25,689 26,533 25,291 18,975 Committed............................................................................... 0 0 0 0 4,699 Assigned................................................................................. 5,191 1.744 3,400 4,483 1,143 Unassigned............................................................................. 14,273 1y113 17907 19286 23,366 Total Fund Balances.......................................................... $43,557 $44,615 $47,909 $49,129 $48,252 Total Liabilities, Deferred Inflows of Resources and Fund Balances.......................................................... $79,596 S79.446 $85.621 $8Z4].fi $87.5$x. Notes: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2012-2016. (2) Format change in 2014. The remainder of this page was left blank intentionally. 21 City of Iowa City, Johnson County, Iowa $$765,000' General Obligation Bonds, Series 2017A Statement of Revenues, Expenditures and Changes in Fund Balance General Fund(I) (Amounts Expressed in Thousands) EXPENDITURES: Audited Fiscal Year Ended June 30 2012 2013 2014 2015 2016 REVENUES: Public Safety ........................................................................... $19,249 $19,685 $20,802 $21,087 Taxes........................................................................................ $37,388 $38,886 $31,388 $31,909 $32,229 Licenses and Permits................................................................ 1,307 1,784 1,660 1,806 3,056 Intergovernmental..................................................................... 4,450 2,871 2,790 3,487 3,830 Charges for Service................................................................... 2,396 1,462 1,321 1,460 1,543 Fines and Forfeits...................................................................... 0 0 0 0 760 Use of Money and Property ....................................................... 1,484 557 677 845 749 Miscellaneous............................................................................ 4,422 4.762 4.576 5 835 1.430 Total Revenues....................................................................... $51,447 $50,322 $42,414 $45,342 $43.597 EXPENDITURES: Current: Public Safety ........................................................................... $19,249 $19,685 $20,802 $21,087 $20,967 Pudic Works........................................................................... 7,385 1,159 1,150 1,624 1,312 Cultural and Recreation........................................................... 12,153 12,299 12,687 11,698 12,038 Community and Economic Development ................................. 1,328 2,076 2,390 3,187 2,842 General Government............................................................... 7,026 6,751 6,680 7,093 5,479 Capital Outlay............................................................................1875 y916 3 255 y333 1.651 Total Expenditures................................................................... $49,016 $43,886 $46,964 $48,022 $44,289 Excess (Deficiency) of Revenues Over (Under) Expenditures........................................................................... 2,431 6,436 4,550) 2,680) 692 Other Financing Sources (Uses): Issuance of Debt....................................................................... $ 0 $ 0 $ 981 $ 0 $ 0 Sale of Capital Assets............................................................... 1,183 496 1,684 164 252 Premiums on Issuance of Bonds ............................................... 0 0 19 0 0 Transfers In............................................................................... 9,818 9,329 9,152 8,780 10,692 Transfers Out............................................................................5 947 1( 1.5941 (3,992 (5.044) (11,129) Total Other Financing Sources and (Uses) .............................. 5,054 1,769) 7.84 3,900 ($ 185) Net Change in Fund Balances ................................................... $ 7,485 $ 4,667 $ 3,294 $ 1,220 ($ 877) Fund Balances - Beginning....................................................... $36,072 $39,948(2) $44,615 $47,909 $49,129 Fund Balances - Ending............................................................ Notes: (1) Source: Audited financial statements of the City for the fiscal years ended June 30, 2012-2016. (2) As restated. EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS Pensions The City contributes to the Municipal Fire and Police Retirement System of Iowa Plan ("MFPRSI"). Membership is mandatory for fire fighters and police officers covered by the provisions of Chapter 411 of the Code of Iowa. Employees of the City are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by MFPRSI. MFPRSI issues a stand-alone financial report which is available to the public by mail at 7155 Lake Drive, Suite #201, West Des Moines, Iowa 50266 or at www.mfprsi.ore. See APPENDIX A - Note 6 for more information. At June 30, 2016, the City reported a liability of $17,406,489 for its proportionate share of the net pension liability. The City also contributes to the Iowa Public Employees' Retirement System ("IPERS"), which is a cost-sharing multiple -employer 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. Employees who retire at age 65 (or anytime after age 55 with 30 or more years of service) are entitled to full monthly benefits. IPERS offers five options for distribution of retirement benefits. Benefits become fully vested after completing seven years of service or after attaining age 65. 22 City of low City, Johnson County. Iowa $9,765,000' General Obligation Bonds, Series 2017A 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 ]PERS. Contribution amounts are set by State statute. The City's share is payable from the applicable funds of the City. All contributions are on a current basis. See APPENDIX A — Note 6 for additional information on IPERS. The following table sets forth the contributions made by the City and employees to IPERS for the period indicated. The City has always made their full statutorily required contributions to IPERS. The City cannot predict the levels of funding that will be required in the future. % of Payroll % of Payroll Fiscal Year Paid by the City Paid by Employee 2014 ........................... 8.93% 5.95% 2015 ........................... 8.93% 5.95% 2016 ........................... 8.93% 5.95% 2017 ........................... 8.93% 5.95% 2018 ........................... 8.93% 5.95% The IPERS fund is administered by the IPERS Board with administration costs paid from income derived from invested funds. IPERS has an unfunded actuarial liability and unrecognized actuarial loss. The following table sets forth certain information about the funding status of IPERS that has been extracted from the Actuarial Valuation Report of IPERS for fiscal years noted below (the "IPERS Reports'). A complete copy of the Reports can be obtained by visiting IPERS website at: http://ww.iners.orPJ or by writing to IPERS at P.O. Box 9117, Des Moines, Iowa 50306-9117. Unfunded Actuarial Funded Ratio UAAL as a Fiscal Accrued Liability (Actuarial Percentage of Covered Year Ending Actuarial Value Actuarial Accrued (Actuarial Value) Value) Covered Payroll (Actuarial June 30 of Assets Fal Liability fbl fbl-fal ral/fbl Payroll fel Value) fib-allfcl) 2012........... $23,530,094,461 $29,446,197,486 $5,916,103,025 79.91% $6,786,158,720 87.18% 2013........... 24,711,096,187 30,498,342,320 5,787,246,133 81.02% 6,880,131,134 84.12% 2014........... 26,460,428,085 32,004,456,088 5,544,028,003 82.68%' 7,099,277,280 78.09% 2015........... 27,915,379,103 33,370,318,731 5,454,939,628 83.65% 7,326,348,141 74.46% 2016........... 29,033,696,587 34,619,749,147 5,586,052,560 83.86% 7,556,515,720 73.92% Source: IPERS Reports According to IPERS, the market value investment return on program assets is as follows: Fiscal Year Ended June 30 2012 ................. 2013 ................. 2014 ................. 2015 ................. 2016 ................. Source: IPERS Reports Investment Return % .......... 3.73% .......... 10.12% .......... 15.88% .......... 3.96% .......... 2.15% Bond Counsel, Disclosure 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 MFPRSI and IPERS discussed above or included on the their websites, including, but not limited to, updates of such information on the State Auditor's website or links to other Internet sites accessed through the websites. Pursuant to GASB Statement No. 68, the City reported a liability of $20,548,735 as of June 30, 2016 for its proportionate share of the net pension liability for ("IPERS"). The net pension liability is the amount by which the total actuarial liability exceeds the pension plan's net assets or fiduciary net position (essentially the market value) available for paying benefits. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's share of contributions to the pension plan relative to the contributions of all IPERS participating employers. As of June 30, 2015, the City's collective proportion was 0.4159256%. For additional information, see the City's Audited Financial Statements for Fiscal Year Ending June 30, 2016 in APPENDIX A. 23 City oflowa City, Johnson County, Iowa 89,765,000* General Obligation Bonds, Series 2017A Other Post -Employment Benefits (OPEB) In June 2004, the Governmental Accounting Standards Board ("GASB") issued GASB 45, which address how state and local governments are required to account for and report their costs and obligations related to other post -employment benefits ("OPEB"), defined to include post-retirement healthcare benefits. GASB 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pension establishes financial reporting standards designed to measure, recognize and display OPEB costs. OPEB costs would become measurable on an accrual basis of accounting, and contribution rates (actuarially determined) would be prescribed for funding such costs. The provisions of GASB 45 do not require governments to fund their OPEBs. The City may establish its OPEB liability at zero as of the beginning of the initial year of implementation; however the unfunded actuarial liability is required to be amortized over future periods. As of July 1, 2014, the most recent valuation date for the period July 1, 2015 through June 30, 2016, the actuarial accrued liability was $5,150,697, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $5,150,697. The covered payroll (annual payroll of active employees covered by the plan) was $35,972,442 and the ratio of the UAAL to covered payroll was 14.3%. As of June 30, 2016, there were no trust fund assets. As of the July 1, 2014 actuarial valuation date, the actuarial cost method used the entry -age normal method. See APPENDIX A — Notes (6) and (7) herein for further discussion of the City's employee retirement benefit obligations. REGISTRATION, TRANSFER AND EXCHANGE See also APPENDIX B - BOOK -ENTRY SYSTEM for information on registration, transfer and exchange of book -entry bonds. The Bonds will be initially issued as book -entry bonds. The City shall cause books (the "Bond Register") for the registration and for the transfer of the Bonds to be kept at the principal office maintained for the purpose by the Bond Registrar in St. Paul, Minnesota. The City will authorize to be prepared, and the Bond Registrar shall keep custody of, multiple bond blanks executed by the City for use in the transfer and exchange of Bonds. Any Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in the Bond Resolution. Upon surrender for transfer or exchange of any Bond at the principal office maintained for the purpose by the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by the registered owner or such owner's attorney duly authorized in writing, the City shall execute and the Bond Registrar shall authenticate, date and deliver in the name of the registered owner, transferee or transferees (as the case may be) a new fully registered Bond or Bonds of the same maturity and interest rate of authorized denominations, for a like aggregate principal amount. The execution by the City of any fully registered Bond shall constitute full and due authorization of such Bond, and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond, provided, however, the principal amount of outstanding Bonds of each maturity authenticated by the Bond Registrar shall not exceed the authorized principal amount of Bonds for such maturity less Bonds previously paid. The Bond Registrar shall not be required to transfer or exchange any Bond following the close of business on the fifteenth day of the month next preceding an interest payment date on such bond (known as the record date), nor to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, nor during a period of fifteen days next preceding mailing of a notice of redemption of any Bonds. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bonds shall be made only to or upon the order of the registered owner thereof or such owner's legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. 24 City oflowa City, Johnson County, Iowa $9,765,000* General Obligation Bonds, Series 20/7A No service charge shall be made for any transfer or exchange of Bonds, but the City or the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a bond surrendered for redemption. TAX MATTERS Tax Exemption Federal tax law contains a number of requirements and restrictions that apply to the Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of Bond proceeds and facilities financed with Bond proceeds, and certain other matters. The City has covenanted to comply with all requirements that must be satisfied in order for the interest on the Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. Subject to the City's compliance with the above -referenced covenants, under present law, in the opinion of Bond Counsel, interest on the Bonds is excludable from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations. Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to 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 or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective purchasers of the Bonds should consult their tax advisors as to collateral federal income tax consequences. The interest on the Bonds is not exempt from present Iowa income taxes. 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. NOT Qualified Tax -Exempt Obligations The City will NOT designate the Bonds as "qualified tax-exempt obligations". Tax Accounting Treatment of Discount and Premium on Certain Bonds The initial public offering price of certain Bonds may be less than the amount payable on such Bonds at maturity ("Discount Bonds"). Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. The initial public offering price of certain Bonds may be greater than the amount of such Bonds at maturity ("Premium Bonds"). Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. 25 City oflova City. Johnson County, Iowa $9.765,000' General obligation Bonds, Series 2017.1 Other Tax Advice In addition to the income tax consequences described above, potential investors should consider the additional tax consequences of the acquisition, ownership, and disposition of the Bonds. For instance, state income tax law may differ substantially from state to state, and the foregoing is not intended to describe any aspect of the income tax laws of any state. Therefore, potential investors should consult their own tax advisors with respect to federal tax issues herein covered by the opinion and with respect to the various state tax consequences of an investment in Bonds. Audits The Internal Revenue Service (the "Service") has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Bonds. If an audit is commenced, under current procedures the Service may treat the City as a taxpayer and the Bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome. Reporting and Withholding Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, including the Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any Bond owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. Tax Legislation Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may be considered by the Iowa legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Bonds will not have an adverse effect on the tax status of interest or other income on the Bonds or the market value or marketability of the Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the Bonds from gross income for federal or state income tax purposes for all or certain taxpayers. Some legislative proposals may carry retroactive effective dates, that, if enacted, could alter or amend the tax matters referred to in this section or affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal or state tax legislation. 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. 26 City of Iowa City, Johnson County, Iowa §9,765,000* General Obligation Bonds, Series 2017A Enforcement Holders of the Bonds 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 authorizing issuance of the Bonds (the "Bond Resolution"). The practical realization of any rights upon any default will depend upon the exercise of various remedies specified in the Bond Resolution. The remedies available to the owners of the Bonds upon an event of default under the Bond Resolution, 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 Bond 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 opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by general principles of equity and public policy and by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. No representation is made, and no assurance is given, that the enforcement of any remedies with respect to such assets will result in sufficient funds to pay all amounts due under the Bond Resolution, including principal of and interest on the Bonds. Opinion Bond Counsel's opinion is not a guarantee of a result, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the City described in this section. No ruling has been sought from the Service with respect to the matters addressed in the opinion of Bond Counsel and Bond Counsel's opinion is not binding on the Service. Bond Counsel assumes no obligation to update its opinion after the issue date to reflect any further action, fact or circumstance, or change in law or interpretation, or otherwise. See APPENDIX C for a draft form of legal opinion for the Bonds. ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS (INCLUDING BUT NOT LIMITED TO THOSE LISTED ABOVE). CONTINUING DISCLOSURE For the purpose of complying with Rule 15c2-12 of the Securities Exchange Commission, as amended and interpreted from time to time (the "Rule"), the City will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds to provide reports of specified information and notice of the occurrence of certain events, as hereinafter described (the "Disclosure Covenants"). The information to be provided on an annual basis, and the events as to which notice is to be given, is set forth in "APPENDIX D — Form of Continuing Disclosure Certificate". This covenant is being made by the City to assist the Underwriter(s) in complying with the Rule. Breach of the Disclosure Covenants will not constitute a default or an "Event of Default" under the Bonds or Resolution, respectively. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the City to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. 27 City oflowa City, Johnson County, Iowa $9,765,000* General Obligation Bonds, Series 20179 In the past five years, the City believes it has materially complied with its disclosure undertakings, except, for the fiscal years ending June 30 of 2012, 2013,2014 and 2015, certain financial information and operating data ("Debt Ratio (overlapping)", "City Funds on Hand" and "General Fund Budget"), while contained in the timely filed CAFRs, were not presented in the same format and indexed in the "Annual Financial Information and Operating Data" portion of the EMMA system. The City has taken steps to ensure future filing of this information in compliance with the applicable undertakings." Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5) of the Rule. OPTIONAL REDEMPTION Bonds due June 1, 2018 - 2023 inclusive, are not subject to optional redemption. Bonds due June 1, 2024 - 2027, inclusive, are callable in whole or in part on any date on or after June 1, 2023, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the City and within any maturity by lot. Thirty days' written notice of redemption shall be given to the registered owner of the Bond. Failure to give written notice to any registered owner of the Bonds or any defect therein shall not affect the validity of any proceedings for the redemption of the Bonds. All Bonds or portions thereof called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment. Written notice will be deemed completed upon transmission to the owner of record. I£ selection by lot within a maturity is required, the Registrar shall designate the Bonds to be redeemed by random selection of the names of the registered owners of the entire annual maturity until the total amount of Bonds to be called has been reached. If less than all of a maturity is called for redemption, the City will notify DTC of the particular amount of such maturity to be redeemed prior to maturity. DTC will determine by lot the amount of each Participant's interest in such maturity to be redeemed and each Participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest LITIGATION There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any proceedings of the City taken with respect to the issuance or sale thereof. There is no litigation now pending, or to the knowledge of the City, threatened against the City that is expected to materially impact the financial condition of the City. LEGAL MATTERS The Bonds are subject to approval as to certain legal matters by Ahlers & Cooney, P.C., Des Moines, Iowa, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement except for guidance concerning the sections regarding "TAX MATTERS", and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify any of the financial or statistical statements, or data contained in this Official Statement, and will express no opinion with respect thereto. The form of legal opinion is set out in APPENDIX C to this Official Statement. The legal opinion to be delivered concurrently with the delivery of the Bonds expresses the professional judgment of the attorneys rendering the opinion as to legal issues expressly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgment, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. 28 City of/owa City, Johnson County, Iowa 59,765,000* General Obligation Bonds, Series 2017A In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in the Bond Counsel's opinion. The opinion will state, in part, that the obligation of the City with respect to the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, and to the exercise of judicial discretion in appropriate cases. OFFICIAL STATEMENT AUTHORIZATION This Official Statement has been authorized for distribution to prospective purchasers of the Bonds. All statements, information, and statistics herein are believed to be correct but are not guaranteed by the consultants or by the City, and all expressions of opinion, whether or not so stated, are intended only as such. The auditors have not performed any additional review and have not consented to the inclusion of the excerpts from the financial statements and the 2016 Audit shown in APPENDIX A. This Official Statement is not to be construed as a contract or agreement amongst the City, the Underwriter, or the holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and expressions of opinions contained herein are subject to change without notice and neither the delivery of this Official Statement or the sale of the Bonds made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. The information contained in this Official Statement is not guaranteed. INVESTMENT RATING The City has supplied certain information and material concerning the Bonds and the City to the rating service shown on the cover page, including certain information and materials which may not have been included in this Official Statement, as part of its application for an investment rating on the Bonds. A rating reflects only the views of the rating agency assigning such rating and an explanation of the significance of such rating may be obtained from such rating agency. Generally, such rating service bases its rating on such information and material, and also on such investigations, studies and assumptions that it may undertake independently. There is no assurance that such rating will continue for any given period of time or that it may not be lowered or withdrawn entirely by such rating service if, in its judgment, circumstances so warrant. Any such downward change in or withdrawal of such rating may have an adverse effect on the secondary market price of the Bonds. An explanation of the significance of the investment rating may be obtained from the rating agency: Moody's Investors Service, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007, telephone 212- 553-1658. UNDERWRITING The Bonds were offered for sale by the City at a public, competitive sale on May 2, 2017. The best bid submitted at the sale was submitted by (the "Underwriter"). The City awarded the contract for sale of the Bonds to the Underwriter at a price of $ (reflecting the par amount of $ , plus a reoffering premium of $ and less an Underwriter's discount of $. The Underwriter has represented to the City that the Bonds have been subsequently re -offered to the public initially at the yields or prices set forth in the on the cover of the Final Official Statement. 29 City oflowa City, Johnson County, Iowa $9,765,000* General Obligation Bonds, Series 2017A MUNICIPAL ADVISOR The City has engaged Speer Financial, Inc. as municipal advisor (the "Municipal Advisor") in connection with the issuance and sale of the Bonds. The Municipal Advisor is a Registered Municipal Advisor in accordance with the rules of the MSRB. The Municipal Advisor will not participate in the underwriting of the Bonds. The financial information included in the Official Statement has been compiled by the Municipal Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not confonn with accounting principles applicable to compilations of financial information. The Municipal Advisor is not a firm of certified public accountants and does not serve in that capacity or provide accounting services in connection with the Bonds. The Municipal Advisor is not obligated to undertake any independent verification of or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement, nor is the Municipal Advisor obligated by the City's continuing disclosure undertaking. CERTIFICATION I have examined this Official Statement dated April 20, 2017, for the $9,765,000* General Obligation Bonds, Series 2017A, believe it to be true and correct and will provide to the purchaser of the Bonds at the time of delivery a certificate confirming to the purchaser that to the best of my knowledge and belief, information in the Official Statement was at the time of acceptance of the bid for the Bonds and, including any addenda thereto, was at the time of delivery of the Bonds true and correct in all material respects and does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. *Subject to change. /s/ DENNIS BOCKENSTEDT Finance Director CITY OF IOWA CITY Johnson County, Iowa The remainder of this page was left blank intentionally. 30 City ojlowa City, Johnson County, Iowa $9,765,000' Geneml Obligation Bonds, Series 2017A APPENDIX B DESCRIBING BOOK -ENTRY -ONLY ISSUANCE 1. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds (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. 2. 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 ("Direct Participants') deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a S&P Global Ratings rating of 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. 3. 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 (`Beneficial Owner") is in tum to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book -entry system for the Securities is discontinued. 4. 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 effect 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. City of Iowa City, Johnson County, Iowa $9,765,000' General Obligation Bonds, Series 2017A 5. 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 thein 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. 6. 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. 7. 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). 8. 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 the Paying 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, the Paying 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 the Paying 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. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to any Tender/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 any Tender/Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book - entry credit of tendered Securities to any Tender/Remarketing Agent's DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. 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. 12. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. City of Iowa City, Johnson County, Iowa $9,765,000` General Obligation Bonds. Series 2017A APPENDIX C DRAFT FORM OF OPINION OF BOND COUNSEL Ahlan 8 Cooney, P.C. Attorneys//'_\, -,L\,• AHLERS COONEY 100 Cour Aenu 100 Court Avenue, Suite 600 ATTORNEYS Des Moines, Iowa 50309-2231 Phone: 515-243-7611 Fax: 515-243-2149 www.ahlemlaw.com We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Iowa City, State of Iowa (the "Issuer"), relating to the issuance of General Obligation Bonds, Series 2017A, by said City, dated , 2017, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $ (the 'Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the resolution authorizing issuance of the Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: I. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2. The Bonds are valid and binding general obligations of the Issuer. 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the Bonds. Taxes have been levied by the Resolution for the payment of the Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent the necessary funds are not provided from other sources. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. Wahard & Baily- 1888, Guernsey & Baily - 1893, Baily & Stipp -1901, Stipp. Peng Bannister & Su rcinpr- 1814. Bannister, Carpenter. AhleS & Cooney - 1860, Allen, Cooney. Donse er, Allbee, Haynie & Smith - 1074. Ahlers, Comrey, Dmweder, Heynie, SmM & AIIIIn, P C - 1990 C.-1 City oflowa City, Johnson County, Iowa $9,765,000• General Obligation Bonds, Series 2017A City of Iowa City, State of Iowa $ General Obligation Bonds, Series 2017A Page 2 We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or other offering material relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors' rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. 01346869-M0714-126 Respectfully submitted, C-2 City oflowa City, Johnson County, lowa $9,765,000• General Obligation Bonds, Series 2017A APPENDIX D DRAFT CONTINUING DISCLOSURE CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Iowa City, State of Iowa (the "Issuer"), in connection with the issuance of $ General Obligation Bonds, Series 2017A (the "Bonds") dated 2017. The Bonds are being issued pursuant to a Resolution of the Issuer approved on 2017 (the "Resolution"). The Issuer covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2 -12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Financial Information" shall mean financial information or operating data of the type included in the final Official Statement, provided at least annually by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Business Day" shall mean a day other than a Saturday or a Sunday or a day on which banks in Iowa are authorized or required by law to close. "Dissemination Agent" shall mean the Issuer or any Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Holders" shall mean the registered holders of the Bonds, as recorded in the registration books of the Registrar. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "Municipal Securities Rulemaking Board" or "MSRB" shall mean the Municipal Securities Rulemaking Board, 1300 I Street NW, Suite 1000, Washington, DC 20005. "National Repository" shall mean the MSRB's Electronic Municipal Market Access website, a/k/a "EMMA" (emma.msrb.org). "Official Statement" shall mean the Issuer's Official Statement for the Bonds, dated , 2017. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" shall mean Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. D-1 City of Iowa City. Johnson County, Iowa $9,765,000' Genera! Obligation Bonds. Series 10I7A "State" shall mean the State of Iowa Section 3. Provision of Annual Financial Information a) The Issuer shall, or shall cause the Dissemination Agent to, not later than two hundred ten (2 10) days after the end of the Issuer's fiscal year (presently June 30th), commencing with information for the 2016/2017 fiscal year, provide to the National Repository an Annual Financial Information filing consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Financial Information filing must be submitted in such format as is required by the MSRB (currently in "searchable PDF" format). The Annual Financial Information filing may be submitted as a single document or as separate documents comprising a package. The Annual Financial Information filing may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Financial Information filing and later than the date required above for the filing of the Annual Financial Information if they are not available by that date. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). b) If the Issuer is unable to provide to the National Repository the Annual Financial Information by the date required in subsection (a), the Issuer shall send a notice to the Municipal Securities Rulemaking Board, if any, in substantially the form attached as Exhibit A. c) The Dissemination Agent shall: i. each year file Annual Financial Information with the National Repository; and ii. (if the Dissemination Agent is other than the Issuer), file a report with the Issuer certifying that the Annual Financial Information has been filed pursuant to this Disclosure Certificate, stating the date it was filed. Section 4. Content of Annual Financial Information. The Issuer's Annual Financial Information filing shall contain or incorporate by reference the following: a) The last available audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under State law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with generally accepted accounting principles, noting the discrepancies therefrom and the effect thereof. If the Issuer's audited financial statements for the preceding years are not available by the time Annual Financial Information is required to be filed pursuant to Section 3(a), the Annual Financial Information filing shall contain unaudited financial statements of the type included in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Financial Information when they become available. b) A table, schedule or other information prepared as of the end of the preceding fiscal year, of the type contained in the final Official Statement under the captions "Property and Trend of Valuations", "Larger Taxpayers", "Tax Rates", "Levies and Collections", "Debt Limit", "Direct Debt", and "Statement of Bonded Indebtedness". D-2 City of Iowa City, Johnson County, Iowa $9,765,000- General Obligation Bonds, Series 2017A Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been filed with the National Repository. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events. a) Pursuant to the provisions of this Section, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than 10 Business Days after the day of the occurrence of the event: L Principal and interest payment delinquencies; ii. Non-payment related defaults, if material; iii. Unscheduled draws on debt service reserves reflecting financial difficulties; iv. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; v. Substitution of credit or liquidity providers, or their failure to perform; vi. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Series Bonds, or material events affecting the tax-exempt status of the Bonds; vii. Modifications to rights of Holders of the Bonds, if material; viii. Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers; ix. Defeasances of the Bonds; x. Release, substitution, or sale of property securing repayment of the Bonds, if material; xi. Rating changes on the Bonds; xii. Bankruptcy, insolvency, receivership or similar event of the Issuer; xiii. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than Pursuant to its terms, if material; and xiv. Appointment of a successor or additional trustee or the change of name of a trustee, if material. D-3 City oflnmva City, Johnson Counq, loiva $9,765,000• General Obligation Bonds, Series 2017A b) Whenever the Issuer obtains the knowledge of the occurrence ora Listed Event, the Issuer shall determine if the occurrence is subject to notice only if material, and if so shall as soon as possible determine if such event would be material under applicable federal securities laws. c) If the Issuer determines that knowledge of the occurrence of a Listed Event is not subject to materiality, or determines such occurrence is subject to materiality and would be material under applicable federal securities laws, the Issuer shall promptly, but not later than 10 Business Days after the occurrence of the event, file a notice of such occurrence with the Municipal Securities Rulemaking Board through the filing with the National Repository. Section 6. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Certificate with respect to each Series of Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds of that Series or upon the Issuer's receipt of an opinion of nationally recognized bond counsel to the effect that, because of legislative action or final judicial action or administrative actions or proceedings, the failure of the Issuer to comply with the terms hereof will not cause Participating Underwriters to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended. Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. Section 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: a) If the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Financial Information filing, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(c), and (ii) the Annual Financial Information filing for D-4 City oflowa City Johnson County, Iowa $9,765,000' General Obligation Bonds, Series 2017A the year in which the change is made will present a comparison or other discussion in narrative form (and also, if feasible, in quantitative form) describing or illustrating the material differences between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Financial Information filing or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Financial Information filing or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Financial Information filing or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations tinder this Disclosure Certificate. Direct, indirect, consequential and punitive damages shall not be recoverable by any person for any default hereunder and are hereby waived to the extent permitted by law. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Date: day of 2017. ATTEST: a City Clerk CITY OF IOWA CITY, STATE OF IOWA M D-5 City oflowa City, Johnson County, Iowa $9,765,000' General Obligation Bonds, Series 20I7A EXHIBIT A NOTICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL FINANCIAL INFORMATION Name of Issuer: City of Iowa City, Iowa. Name of Bond Issue: $ General Obligation Bonds, Series 2017A Dated Date of Issue: , 2017 NOTICE 1S HEREBY GIVEN that the Issuer has not provided Annual Financial Information with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Financial Information will be filed by Dated: day of , 20_ 01346817-1\10714-126 CITY OF IOWA CITY, STATE OF IOWA By: Its: Ip i OFFICIAL BID FORM City of Iowa City 410 E. Washington Street Iowa City, Iowa 52240 Council Members: May 2, 2017 Speer Financial, Inc. Facsimile: (319) 291-8628 For the $9,765,000* General Obligation Bonds, Series 2017A (the "Bonds"), of the City of Iowa City, Johnson County, Iowa (the "City"), as described in the annexed Official Terms of Offering, which is expressly made a part of this bid, we Will pay you $ (no less than $9,686,880). The Bonds are to bear interest at the following respective rates (each a multiple of 1/8 or 1/100 of 1%) for the Bonds of each designated maturity. AMOUNTS* AND MATURITIES — JUNE 1 $900,000............2018 % $ 940,000 ......... 2021 % $1,025,000.........2025 905,000 ............ 2019 % 955,000 ......... 2022 % 1,055,000 ......... 2026 920,000 ............ 2020 % g80,000 ......... 2023 % 1,085,000 ......... 2027 1,000,000.........2024 Any consecutive maturities maybe aggregated iata term bonds at the option ofthe bidder, in Which ease the mandmory redempilon provisions shall be on the same schedule as above DfaturiGes: Term blalurity• Almurities: Term Maturity_ Maturities: Terns Maturity_ Afaturides: Term Maturity "Subject to principal adjustment in accordance with the Official Terms of Offering. The Bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Alders & Cooney, P.C., Des Moines, Iowa. The City will pay for the legal opinion. The Purchaser agrees to apply for CUSIP numbers and pay the fee charged by the CUSIP Service Bureau and will accept the Bonds with the CUSIP numbers as entered on the Bonds. As evidence of our good faith, if we are the winning bidder, we will wire transfer the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time to the City's good faith bank and under the terms provided in the Official Terms of Offering for the Bonds. Alternatively, we have wire transferred or enclosed herewith a check payable to the City in the amount of the Deposit under the terms provided in the Official Terms of Offering for the Bonds. Attached hereto is a list of members of our account on whose behalf this bid is made. Form of Deposit (Check One) Account Manaeer Information Bidders Option Insurance Priorto Bid Oneninc Certified/Cashier's Check I ] Wire Transfer I ] Within TWO Hours of Bid Ouenine: Wire Transfer I ] Amount: 5195,300 UndcrwriterBank Address Authorized Rep City State/Zip Direct Phone ( 1 FAX Number j E -Mail Address We have purchased insurance from: Nome of Insurer (Please fill in) Premium: Maturities: (Check One) LI Y LI An The foregoing bid was accepted and the Bonds sold by resolution of the City on May 2, 2017, and receipt is hereby acknowledged of the good faith Deposit which is being held in accordance with the terms of the annexed Official Terms of Offering. CITY OF IOWA CITY ATTEST: Johnson County, Iowa City Clerk NOT PART OF THE RID /Ca/eulntian efone interest cost) Gross lmnest b Less Pmmi,a/Plus Discount 5 True Interest Cost 5 True Interest Rate TOTALBOND YEARS 55,05015 AVERAGE LIFE 5.638 Years Mayor City ofhowa City, Johnson Comity, Iowa $9,765,000* General Obligation Braids, Series 2017A Page i of5 OFFICIAL TERMS OF OFFERING $9,765,000* CITY OF IOWA CITY Johnson County, Iowa General Obligation Bands, Series 2017A The City of Iowa City, Johnson County, Iowa, (the "City"), will receive electronic bids on the SpeerAuction ("SpeerAuction") website address "www.SpeerAuction.com" for its $9,765,000* General Obligation Bonds, Series 2017A (the "Bonds"), on an all or none basis between 9:30 A.M. and 10:00 A.M., C.D.T., Tuesday, May 2, 2017. To bid electronically, bidders must have: (1) completed the registration form on the SpeerAuction website, and (2) requested and received admission to the City's sale (as described below). The City will also receive sealed bids for the Bonds, on an all or none basis, at City Hall, 410 E. Washington Street, Iowa City, Iowa, until 10:00 A.M., C.D.T., Tuesday, May 2, 2017. The City will also receive facsimile bids at (319) 291-8628 for the Bonds, on an all or none basis, until 10:00 A.M., C.D.T., Tuesday, May 2, 2017. Upon receipt, facsimile bids will be sealed and treated as a sealed bids, and along with all other sealed bids will be publicly opened and, together with any electronic bids, read. Award will be made or all bids rejected at a meeting of the City on that date. The City reserves the right to reject all bids, to reject any bid proposal not conforming to this Official Terms of Offering, and to waive any irregularity or informality with respect to any bid. Additionally, the City reserves the right to modify or amend this Official Terms of Offering; however, any such modification or amendment shall not be made less than twenty-four (24) hours prior to the date and time for receipt of bids on the Bonds and any such modification or amendment will be announced on the Amendments Page of the SpeerAuction webpage and through Thomson Municipal News. The Bonds will constitute valid and legally binding obligations of the City payable both as to principal and interest from ad valorem taxes levied against all taxable property within the corporate limits of the City without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors' rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. The Bonds will be in fully registered form in the denominations of $5,000 and integral multiples thereof in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal and interest payments on the Bonds will be paid. Individual purchases will be in book -entry form only. Interest on each Bonds shall be paid by check or draft of the Bond Registrar to the person in whose name such Bond is registered at the close of business on the fifteenth day of the month next preceding an interest payment date on such bond. The principal of the Bonds shall be payable in lawful money of the United States of America at the principal office maintained for the purpose by the Bond Registrar in St. Paul, Minnesota. Semiannual interest is due June 1 and December I of each year, commencing December 1, 2017 and is payable by U.S. Bank, St. Paul, Minnesota (the "Bond Registrar"). The Bonds are dated the date of delivery (expected to be on or about June 15, 2017). $900,000 ...................... 2018 905,000 ...................... 2019 920,000 ...................... 2020 AMOUNTS* AND MATURITIES — JUNE 1 $ 940,000 ...................2021 955,000 ................... 2022 980,000 ................... 2023 1,000,000 ................... 2024 $1,025,000 ................... 2025 1,055,000 ................... 2026 1,085,000 ................... 2027 Any consecutive maturides may be aggregated into term bonds m the option ofthe bidder, in winch case the mandatoryredemption provisions shalt be on the same schedule as .bar a The Bonds due June 1, 2018 - 2023, inclusive, are non -callable. The Bonds due June 1, 2024 - 2027, inclusive, are callable in whole or in part and on any date on or after June 1, 2023, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in any order of maturity as determined by the City and within any maturity by lot. *ADJUSTMENTS TO PRINCIPAL AMOUNT AFTER DETERMINATION OF BEST BID. 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 Winning Bidder. The City may increase or decrease each maturity in increments of$5, 000, but the total amount to be issued will not exceed $9,765,000. Interest rates specified by the Winning Bidderfor each maturity will not change. Final adjustments shall be in the sole discretion of the City. The dollar amount ofthe purchase price proposed by the Winning Bidder will be changed ifthe aggregate principal amount of the Bonds is adjusted as described above. Any change in the principal amount of any maturity of the Bands will be made while maintaining, as closely as possible, the Winning Bidder's net compensation, calculated as a percentage ofbond principal. The Winning Bidder may not withdraw or modify its bid as a result ofany post -bid adjustment. Any adjustment shall be conclusive, and shall be binding upon the Winning Bidder. City of/owa City. Johnson Coungt Iowa $9,765.000* General Obligation Bonds, Series 2017A Page 1 of5 Method of Bidding Electronically Notwithstanding the fact that the City permits receiving bids electronically using SpeerAuction, all bidders must have a signed, but uncompleted, Official Bid Form delivered to Speer Financial, hic., Suite 608, 531 Commercial Street, Waterloo, Iowa, (319) 291-8628 facsimile, prior to the close of bidding to which a printout of the electronic bid will be attached and delivered to the City. All -or -none bids must be submitted via the internet address www.SpeerAuction.com. The use of SpeerAuction shall be at the bidder's risk and expense and the City shall have no liability with respect thereto, including (without limitation) liability with respect to incomplete, late arriving and non -arriving bids. To bid via the SpeerAuction webpage, bidders must first visit the SpeerAuction webpage where, if they have not previously registered with either SpeerAuction, Grant Street Group (the "Auction Administrator") or any other website administered by the Auction Administrator, they may register and then request admission to bid on the Bonds. Bidders will be notified prior to the scheduled bidding time of their eligibility to bid. Only registered broker-dealers and dealer banks with DTC clearing arrangements will be eligible to bid electronically. The "Rules" of the SpeerAuction bidding process may be viewed on the SpeerAuction webpage and are incorporated herein by reference. Bidders must comply with the Rules of SpeerAuction in addition to the requirements of the City's Official Terms of Offering. In the event the Rules of SpeerAuction and this Official Terms of Offering conflict, this Official Terms of Offering shall be controlling. All electronic bids must be submitted on the SpeerAuction webpage. Electronic bidders may change and submit bids as many times as they choose during the sale period but may not delete a submitted bid. The last bid submitted by an electronic bidder before the deadline for receipt of bids will be compared to all other final bids to determine the winning bidder. During the bidding, no bidder will see any other bidder's bid nor the status of their bid relative to other bids (e.g., whether their bid is a leading bid). The electronic bidder bears all risk of transmission failure. Any questions regarding bidding on the SpeerAuction website should be directed to Grant Street Group at (412) 391-5555 x 370. Each bidder shall be solely responsible for making necessary arrangements to access SpeerAuction for purposes of submitting its internet bid in a timely manner and in compliance with the requirements of the Terms of Offering. The City is permitting bidders to use the services of the SpeerAuction solely as a communication mechanism to conduct the internet bidding and the SpeerAuction is not an agent of the City. Provisions of the Notice of Sale, Terms of Offering or Official Bid Form shall control in the event of conflict with information provided by the Internet Bid System. Electronic Facsimile Biddine: Bids may be submitted via facsimile at (319) 291-8628. Electronic facsimile bids will be sealed and treated as sealed bids. Neither the City nor its agents will assume liability for the inability of the bidder to reach the above named fax numbers prior to the time of sale specified above. Transmissions received after the deadline will be rejected. Bidders electing to submit bids via facsimile transmission bear full and complete responsibility for the transmission of such bid. Neither the City nor its agents will assume responsibility for the inability of the bidder to reach the above specified fax number prior to the time of sale. Time of receipt shall be the time recorded by the person receiving facsimile and shall be conclusive. Bidding Parameters and Award of the Bonds All interest rates must be in multiples of one-eighth or one one-hundredth of one percent (1/8 or 1/100 of 1%), and not more than one rate for a single maturity shall be specified. The rates bid shall be in non -descending order. The differential between the highest rate bid and the lowest rate bid shall not exceed five percent (5%). All bids must be for all of the Bonds and must be for not less than $9,686,880. City of Iowa City, Johnson County, Iowa $9,765,000' General Obligation Bonds. Series 20179 Page 3 of Award of the Bonds: The Bonds will be awarded on the basis of true interest cost, determined in the following manner. True interest cost shall be computed by determining the annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the Bonds from the payment dates thereof to the dated date and to the bid price. For the purpose of calculating true interest cost, the Bonds shall be deemed to become due in the principal amounts and at the times set forth in the table of maturities set forth above. In the event two or more qualifying bids produce the identical lowest true interest cast, the winning bid shall be the bid that was submitted first in time on the SpeerAuction webpage or if all such bids are not submitted electronically, the winning bid shall be determined by lot. The Bonds will be awarded to the bidder complying with the terms of this Official Terms of Offering whose bid produces the lowest true interest cost rate to the City as determined by the City's Registered Municipal Advisor, which determination shall be conclusive and binding on all bidders; provided, that the City reserves the right to reject all bids or any non -conforming bid and reserves the right to waive any informality in any bid. Electronic bidders should verify the accuracy of their final bids and compare them to the winning bids reported on the SpeerAuction Observation Page immediately after the bidding. The premium or discount, if any, is subject to pro rata adjustment if the maturity amounts of the Bonds are changed, allowing the same dollar amount of profit per $1,000 bond as bid. The true interest cost of each electronic bid will be computed by SpeerAuction and reported on the Observation Page of the SpeerAuction webpage immediately following the date and time for receipt of bids. These true interest costs are subject to verification by the City's Municipal Advisor, will be posted for information purposes only and will not signify an actual award of any bid or an official declaration of the winning bid. The City or its Municipal Advisor will notify the bidder to whom the Bonds will be awarded, if and when such award is made. The winning bidder will be required to make the standard filings and maintain the appropriate records routinely required pursuant to MSRB Rules G-8, G-11 and G-36. The winning bidder will be required to pay the standard MSRB charge for Bonds purchased. In addition, the winning bidder who is a member of the Securities Industry and Financial Markets Association ("SIFMA") will be required to pay SIFMA's standard charge per Bond. The winning purchaser will be required to certify to the City immediately after the opening of bids: (i) the initial public offering price of each maturity of the Bonds (not including bond houses and brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Bonds (not less than 10% of each maturity) were sold to the public; or (ii) if less than 10% of any maturity has been sold, the price for that maturity determined as of the time of the sale based upon the reasonably expected initial offering price to the public; and (iii) that the initial public offering price does not exceed their fair market value of the Bonds on the sale date. The winning purchaser will be required to provide a certificate satisfactory to Bond Counsel and the City at closing confirming the information required by this paragraph. Good Faith Deposit and Other Matters The winning bidder is required to a wire transfer from a solvent bank or trust company to the City's good faith bank the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time as evidence of the good faith of the bidder. Alternatively, a bidder may submit its Deposit upon or prior to the submission of its bid in the form of a certified or cashier's check on, or a wire transfer from, a solvent bank or trust company for TWO PERCENT OF PAR payable to the Treasurer of the City. The City reserves the right to award the Bonds to a winning bidder whose wire transfer is initiated but not received within such two hour time period provided that such winning bidder's federal wire reference number has been received. In the event the Deposit is not received as provided above, the City may award the Bonds to the bidder submitting the next best bid provided such bidder agrees to such award. City oflmra City, Johnson County. lova $9,765,000' General Obligation Bonds, Series 1017A Page 4 of If a wire transfer is used for the Deposit, it must be sent according to the following wire instructions: Amalgamated Bank of Chicago Corporate Trust 30 North LaSalle Street 38`h Floor Chicago, IL 60602 ABA # 071003405 Credit To: 3281 Speer Bidding Escrow RE: City of Iowa City, Johnson County, Iowa bid for $9,765,000* General Obligation Bonds, Series 2017A If the wire shall arrive in such account prior to the date and time of the sale of the Bonds. Contemporaneously with such wire transfer, the prospective purchaser shall send an email to biddingescrow@aboc.com with the following information: (1) indication that a wire transfer has been made, (2) the amount of the wire transfer, (3) the issue to which it applies, and (4) the return wire instructions if such prospective purchaser is not awarded the Bonds. The City and any prospective purchaser who chooses to wire the Deposit hereby agree irrevocably that Speer Financial, Inc. ("Speer") shall be the escrow holder of the Deposit wired to such account subject only to these conditions and duties: (i) if the bid is not accepted, Speer shall, at its expense, promptly return the Deposit amount to the unsuccessful prospective purchaser; (ii) if the bid is accepted, the Deposit shall be forwarded to the City, (iii) Speer shall bear all costs of maintaining the escrow account and returning the funds to the prospective purchaser; (iv) Speer shall not be an insurer of the Deposit amount and shall have no liability except if it willfully fails to perform, or recklessly disregards, its duties specified herein; and (v) income earned on the Deposit, if any, shall be retained by Speer. The City covenants and agrees to enter into a written agreement, certificate or contract, constituting an undertaking (the "Undertaking") to provide ongoing disclosure about the City for the benefit of the beneficial owners of the Bonds on or before the date of delivery of the Bonds as required under Section (b)(5) of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Undertaking shall be as described in the Official Statement, with such changes as may be agreed in writing by the Underwriter. The Underwriter's obligation to purchase the Bonds shall be conditioned upon the City delivering the Undertaking on or before the date of delivery of the Bonds. The Bonds will be delivered to the successful purchaser against full payment in immediately available funds as soon as they can be prepared and executed, which is expected to be on or about June 15, 2017. Should delivery be delayed beyond sixty (60) days from the date of sale for any reason beyond the control of the City except failure of performance by the purchaser, the City may cancel the award or the purchaser may withdraw the good faith deposit and thereafter the purchaser's interest in and liability for the Bonds will cease. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts, and interest rates of the Bonds, and any other information required by law or deemed appropriate by the City, shall constitute a "Final Official Statement" of the City with respect to the Bonds, as that term is defined in the Rule. By awarding the Bonds to any underwriter or underwriting syndicate, 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 50 copies of the Final Official Statement to permit each "Participating Underwriter" (as that term is defined in the Rule) to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the Bonds agrees thereby that if its bid is accepted by the City 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. City oflowa City, Johnson County, Iowa $9,765,000* General Obligation Bonds, Series 20I7A Page 5 of5 By submission of its bid, the senior managing underwriter of the successful purchaser agrees to supply all necessary pricing information and any Participating Underwriter identification necessary to complete the Official Statement within 24 hours after award of the Bonds. Additional copies of the Final Official Statement may be obtained by Participating Underwriters from the printer at cost. The City will, at its expense, deliver the Bonds to the purchaser in New York, New York (or arrange for "FAST" delivery) through the facilities of DTC and will pay for the bond attorney's opinion. At the time of closing, the City will also furnish to the purchaser the following documents, each dated as of the date of delivery of the Bonds: (1) the legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa, that the Bonds are lawful and enforceable obligations of the City in accordance with their terms; (2) the opinion of said attorneys that the interest on the Bonds is exempt from federal income taxes as and to the extent set forth in the Official Statement for the Bonds; and (3) a no litigation certificate by the City. The City has authorized the printing and distribution of an Official Statement containing pertinent information relative to the City and the Bonds. Copies of such Official Statement or additional information may be obtained from Mr. Dennis Bockenstedt, Finance Director, City of Iowa City, 410 E. Washington Street, Iowa City, Iowa 52240 or an electronic copy of this Official Statement is available from the www.speerfinancial.com website under "Official Statement Sales/Competitive Calendar" or from the Registered Municipal Advisor to the City, Speer Financial, Inc., 531 Commercial Street, Suite 608, Waterloo, Iowa 50701 (telephone (319) 291-2077), and One North LaSalle Street, Suite 4100, Chicago, Illinois 60602 (telephone (312) 346-3700). /s/ DENNIS BOCKENSTEDT Finance Director CITY OF IOWA CITY Johnson County, Iowa New Issue Investment Rating: Date of Sale: Tuesday, May 2, 2017 (Alternative Bid Methods) Moody's Investors Service ... Series 201713 10:00 - 10:30 A.M., C.D.T. (Internet) 10:30 A.M., C.D.T. (Sealed Bids) (Rating Requested) Series 2017C 10:30 - 11:00 A.M., C.D.T. (Internet) 11:00 A.M., C.D.T. (Sealed Bids) Official Statement Assuming compliance with certain covenants, in the opinion of Ahlers & Cooney, P. C, Bond Counsel, under present law and assuming continued compliance with the requirements of the Internal Revenue Code of 1986, as amended (the "Code'), the interest on the Bonds is excludable from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations. Interest on the Bonds is not exempt from present Iowa income taxes. The Bonds will NOT be designated as "qualified tax-exempt obligations ". See "TAX MATTERS"herein for a more detailed discussion. Dated Date of Delivery CITY OF IOWA CITY JOHNSON COUNTY, IOWA $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C Book -Entry Due Serially as Described Herein The $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B (the "Sewer Bonds") and $5,910,000' Water Revenue Bonds, Series 2017C (the "Water Bonds", and collectively with the Sewer Bonds, the "Bonds") are being issued by the City of Iowa City, Johnson County, Iowa (the "City"). Interest is payable semiannually on January 1 and July 1 of each year, commencing January 1, 2018. Interest is calculated based on a 360 -day year of twelve 30 -day months. The Bonds will be issued using a book -entry system. The Depository Trust Company ("DTC"), New York, New York, will am as securities depository for the Bonds. The ownership of one fully registered Bond for each maturity and each series will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Bonds will be made to purchasers. The Bonds will mature on July 1 as described herein. See "BOND ISSUE SUMMARY" herein. OPTIONAL REDEMPTION The Sewer Bonds are not subject to optional redemption prior to maturity. The Water Bonds due July 1, 2018 - 2022, inclusive, are not subject to optional redemption. The Water Bonds due July 1, 2023 - 2025, inclusive, are callable in whole or in part on any date on or after July 1, 2022, at a price of par and accrued interest. If less than all the Water Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the City and within any maturity by lot. See "OPTIONAL REDEMPTION" herein. PURPOSE, LEGALITY AND SECURITY The proceeds of the Sewer Bonds are expected to be used to: (i) currently refund the City's outstanding Sewer Revenue Refunding Capital Loan Notes, Series 2009A, and (ii) to pay the costs of issuing the Sewer Bonds. See "THE PLAN OF FINANCING" herein. The proceeds of the Water Bonds are expected to be used to: (i) provide funds for extending, improving and equipping the water utility of the City, including water plant roof replacement and water distribution building repairs; (ii) currently refund the City's outstanding Water Revenue Refunding Capital Loan Notes, Series 2009B; and (iii) to pay the costs of issuing the Water Bonds. See "THE PLAN OF FINANCING" herein. The Sewer Bonds and the interest thereon shall be payable solely and only out of the net revenues of the City's Municipal Sewer System and from amounts on deposit in the Sewer Sinking Fund and Sewer Reserve Fund. The Water Bonds and the interest thereon shall be payable solely and only out of the net revenues of the City's Municipal Water System and from amounts on deposit in the Water Sinking Fund and Water Reserve Fund. The Bonds shall not be a debt of nor a charge against the State of Iowa nor of the City within the meaning of any constitutional or statutory limitation or provision and are not payable in any manner by taxation, and the City shall not be liable by reason of the failure of the net revenues to be sufficient for the payment of the Bonds. The City will furnish the written approving opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, evidencing legality of the Bonds and that the interest thereon is exempt from Federal income taxes as and to the extent discussed under the heading "TAX MATTERS" herein. The City does not intend to designate the Bonds as "qualified tax-exempt obligations" pursuant to the small issuer exception provided by Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. This Official Statement is dated April 20, 2017, and has been prepared under the authority of the City. An electronic copy of this Official Statement is available from the www.sneerfinancial.com web site under "Official Statement Sales Calendar". Additional copies may be obtained from Mr. Dennis Bockenstedt, Finance Director, City of Iowa City, 410 E. Washington Street, Iowa City, Iowa 52240, or from the Registered Municipal Advisors to the City. Speer Financial, Inc. *.w�aw»+uas+..amwm. "10*iOLL �I�Rf. M1! � • MAiOLLq. P'.. 1N01 •Y�01�= mD,il -Subject to principal adjustment in accordance with the Official Terms of Offering, 04-27-17 IP10 New Issue Investment Rating: Date of Sale: Tuesday, May 2, 2017 (Alternative Bid Methods) Moody's Investors Servicc ... Series 201713 10:00 - 10:30 A.M., C.D.T. (Internet) 10:30 A.M., C.D.T. (Sealed Bids) (Rating Requested) Series 2017C 10:30 - 11:00 A.M., C.D.T. (Internet) 11:00 A.M., C.D.T. (Sealed Bids) Official Statement Assuming compliance with certain covenants, in the opinion of Ahlers & Cooney, P. C, Bond Counsel, under present law and assuming continued compliance with the requirements of the Infernal Revenue Code of 1986, as amended (the "Code'), the interest on the Bonds is excludable from gross income for federal income tar purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose ofdetermining the alternative minimum tax imposed on such corporations. Interest on the Bonds is not exempt from present Iowa income taxes. The Bonds will NOT be designated as "quaked tax-exempt obligations ". See `TAX MATTERS" herein for a more detailed discussion. Dated Date of Delivery CITY OF IOWA CITY JOHNSON COUNTY, IOWA $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C Book -Entry Due Serially as Described Herein The $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B (the "Sewer Bonds") and $5,910,000* Water Revenue Bonds, Series 2017C (the "Water Bonds", and collectively with the Sewer Bonds, the `Bonds") are being issued by the City of Iowa City, Johnson County, Iowa (the "City"). Interest is payable semiannually on January 1 and July 1 of each year, commencing January 1, 2018. Interest is calculated based on a 360 -day year of twelve 30 -day months. The Bonds will be issued using a book -entry system. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The ownership of one fully registered Bond for each maturity and each series will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Bonds will be made to purchasers. The Bonds will mature on July 1 as described herein. See "BOND ISSUE SUMMARY" herein. OPTIONAL REDEMPTION The Sewer Bonds are not subject to optional redemption prior to maturity. The Water Bonds due July 1, 2018 - 2022, inclusive, are not subject to optional redemption. The Water Bonds due July 1, 2023 - 2025, inclusive, are callable in whole or in part on any date on or after July 1, 2022, at a price of par and accrued interest. If less than all the Water Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the City and within any maturity by lot. See "OPTIONAL REDEMPTION" herein. PURPOSE, LEGALITY AND SECURITY The proceeds of the Sewer Bonds are expected to be used to: (i) currently refund the City's outstanding Sewer Revenue Refunding Capital Loan Notes, Series 2009A, and (ii) to pay the costs of issuing the Sewer Bonds. See "THE PLAN OF FINANCING" herein. The proceeds of the Water Bonds are expected to be used to: (i) provide funds for extending, improving and equipping the water utility of the City, including water plant roof replacement and water distribution building repairs; (ii) currently refund the City's outstanding Water Revenue Refunding Capital Loan Notes, Series 200913; and (iii) to pay the costs of issuing the Water Bonds. See "THE PLAN OF FINANCING" herein. The Sewer Bonds and the interest thereon shall be payable solely and only out of the net revenues of the City's Municipal Sewer System and from amounts on deposit in the Sewer Sinking Fund and Sewer Reserve Fund. The Water Bonds and the interest thereon shall be payable solely and only out of the net revenues of the City's Municipal Water System and from amounts on deposit in the Water Sinking Fund and Water Reserve Fund. The Bonds shall not be a debt of nor a charge against the State of Iowa nor of the City within the meaning of any constitutional or statutory limitation or provision and are not payable in any manner by taxation, and the City shall not be liable by reason of the failure of the net revenues to be sufficient for the payment of the Bonds. The City will furnish the written approving opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, evidencing legality of the Bonds and that the interest thereon is exempt from Federal income taxes as and to the extent discussed under the heading "TAX MATTERS" herein. The City does not intend to designate the Bonds as "qualified tax-exempt obligations" pursuant to the small issuer exception provided by Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. This Official Statement is dated April 20, 2017, and has been prepared under the authority of the City. An electronic copy of this Official Statement is available from the www.sneci financial.com web site under "Official Statement Sales Calendar". Additional copies may be obtained from Mr. Dennis Bockenstedt, Finance Director, City of Iowa City, 410 E. Washington Street, Iowa City, Iowa 52240, or from the Registered Municipal Advisors to the City. "FSpeer FTmwd4 rl, Inc. vaov�etnu�nAwvwe. rrAna� s"s w�aNra*wrr.amns® n1�Y�,,m��.�tlYLCO. PA �m tiM�Nn�� �"s,am *Subject 0 principal adjustment in accordance with the Official Terms of Offering. For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the City from time to time (collectively, the "Official Statement'), may be treated as an Official Statement with respect to the Bonds described herein that is deemed near final as of the date hereof (or the date of any such supplement or correction) by the City. The Oficial Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, 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. Any such addendum or addenda shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference. Alternatively, such final terms of the Bonds and other information may be included in a separate document entitled "Final Official Statement' rather than through supplementing the Official Statement by an addendum or addenda. No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations with respect to the Bonds other than as contained in the Official Statement or the Final Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the City. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CITY SINCE THE RESPECTIVE DATES THEREOF. References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Official Statement or the Final Official Statement, they will be furnished on request. This Official Statement does not constitute an offer to sell, or solicitation of an offer to buy, any securities to any person in any jurisdiction where such offer or solicitation of such offer would be unlawful. TABLE OF CONTENTS Page BONDISSUE SUMMARY....................................................................................................................................................3 $5,235,000* SEWER REVENUE REFUNDING BONDS, SERIES 2017B.....................................................................4 $5,910,000* WATER REVENUE BONDS, SERIES 2017C............................................................................................5 BONDHOLDERS' RISKS.....................................................................................................................................................6 SecondaryMarket............................................................................................................................................................... 6 RatingsLoss........................................................................................................................................................................6 Forward -Looking Statements..............................................................................................................................................7 Tax Matters and Loss of Tax Exemption............................................................................................................................7 DTC -Beneficial Owners.....................................................................................................................................................7 FederalTax Legislation...................................................................................................................................................... 8 ContinuingDisclosure........................................................................................................................................................ 8 Suitabilityof Investment..................................................................................................................................................... 8 Bankruptcy.......................................................................................................................................................................... 8 Stateand Federal Funding................................................................................................................................................... 8 OtherFactors....................................................................................................................................................................... 8 PAYMENT OF AND SECURITY FOR THE SEWER BONDS..........................................................................................9 Introduction......................................................................................................................................................................... 9 Sourceof Payment.............................................................................................................................................................. 9 UnpaidSewer Charges........................................................................................................................................................ 9 SewerRate Covenant.......................................................................................................................................................... 9 SewerReserve Fund........................................................................................................................................................... 9 SewerImprovement Fund.................................................................................................................................................10 SewerAdditional Bonds Test...........................................................................................................................................10 DESCRIPTION OF THE MUNICIPAL SEWER SYSTEM...............................................................................................10 Management And Administration.....................................................................................................................................10 SewerSystem Rates And Charges.................................................................................................................................... l l SEWER SYSTEM DEBT INFORMATION........................................................................................................................12 PAYMENT OF AND SECURITY FOR THE water BONDS.............................................................................................13 Introduction.......................................................................................................................................................................13 Sourceof Payment............................................................................................................................................................13 UnpaidWater Charges...................................................................................................................................................... 14 WaterRate Covenant........................................................................................................................................................14 WaterReserve Fund.......................................................................................................................................................... 14 WaterImprovement Fund.................................................................................................................................................14 WaterAdditional Bonds Test............................................................................................................................................ 15 DESCRIPTION OF THE MUNICIPAL WATER SYSTEM...............................................................................................15 Management And Administration.....................................................................................................................................15 WaterSources...................................................................................................................................................................15 WaterTreatment Processes...............................................................................................................................................15 DistributionSystem..........................................................................................................................................................16 Billingand Collections......................................................................................................................................................16 Water System Rates and Charges.....................................................................................................................................16 WATER SYSTEM DEBT INFORMATION.......................................................................................................................18 GENERAL CITY INFORMATION.....................................................................................................................................19 PLANOF FINANCING.......................................................................................................................................................19 SEWERAGE SYSTEM and water system FINANCIAL INFORMATION........................................................................20 FinancialReports..............................................................................................................................................................20 No Consent or Updated Information Requested of the Auditor........................................................................................20 Summary Financial Information.......................................................................................................................................20 EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS...................................25 Pensions......................................... :.................................................................................................................................. 25 Other Post -Employment Benefits(OPEB)........................................................................................................................26 (i) REGISTRATION, TRANSFER AND EXCHANGE........................................................................................................... 26 TAXMATTERS................................................................................................................................................................... 27 TaxExemption..................................................................................................................................................................27 NOT Qualified Tax -Exempt Obligations..........................................................................................................................27 Tax Accounting Treatment of Discount and Premium on Certain Bonds........................................................................28 OtherTax Advice..............................................................................................................................................................28 Audits................................................................................................................................................................................ 28 Reportingand Withholding...............................................................................................................................................28 TaxLegislation.................................................................................................................................................................28 Enforcement...................................................................................................................................................................... 29 Opinion............................................................................................................................................................................. 29 CONTINUINGDISCLOSURE............................................................................................................................................30 OPTIONAL REDEMPTION................................................................................................................................................30 LITIGATION........................................................................................................................................................................ 30 LEGALMATTERS..............................................................................................................................................................31 OFFICIAL STATEMENT AUTHORIZATION..................................................................................................................31 INVESTMENTRATING.....................................................................................................................................................31 UNDERWRITING............................................................................................................................................................... 32 MUNICIPALADVISOR......................................................................................................................................................32 CERTIFICATION................................................................................................................................................................32 APPENDIX A -CITY INFORMATION APPENDIX B -FISCAL YEAR 2016 AUDITED FINANCIAL STATEMENTS APPENDIX C -DESCRIBING BOOK -ENTRY -ONLY ISSUANCE APPENDIX D -DRAFT FORMS OF LEGAL OPINIONS APPENDIX E -DRAFT FORM OF CONTINUING DISCLOSURE CERTIFICATE OFFICIAL BID FORMS OFFICIAL TERMS OF OFFERINGS City of Iowa City, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bonds. Series 2017B $5,910,000- Water Revenue Bonds, Series 2017C BOND ISSUE SUMMARY This Bond Issue Summary is expressly qualified by the entire Official Statement, including the Official Terms of Offering and the Official Bid Forms, which are provided for the convenience of potential investors and which should be reviewed in their entirety by potential investors. The following descriptions apply equally to the Bonds. Other terms specific to each series are provided separately herein. Issuer: City of Iowa City, Johnson County, Iowa. Dated Date: Date of delivery (expected to be on or about June 15, 2017). Interest Due: Each January 1 and July 1, commencing January 1, 2018. Authorization: The Bonds are being issued pursuant to authority established in Code of Iowa, Chapter 384, and all laws amendatory thereof and supplementary thereto, and in conformity with a resolution of the City Council duly passed and approved. Investment Rating: An investment rating for the Bonds has been requested from Moody's Investors Service, New York, New York. See "INVESTMENT RATING" herein. Tax Matters: Ahlers & Cooney, P.C., Des Moines, Iowa, will provide an opinion as to the tax exemption of the Bonds as discussed under "TAX MATTERS" in this Official Statement. Interest on the Bonds is not exempt from present State of Iowa income taxes. See APPENDIX C for a draft form of legal opinion for the Bonds. Not Bank Qualified: The Bonds are not "qualified tax-exempt obligations" under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Bond Registrar/Paying Agent: U.S. Bank, St. Paul, Minnesota. Delivery: The Bonds are expected to be delivered on or about June 15, 2017. Book -Entry Form: The Bonds will be registered in the name of Cede & Co. as nominee for The Depository Trust Company ("DTC"), New York, New York. DTC will act as securities depository of the Bonds. See APPENDIX B herein. Denomination: $5,000 or integral multiples thereof. Municipal Advisor: Speer Financial, Inc., Waterloo, Iowa and Chicago, Illinois. City oflowa City, Johnson County, Iowa $5,235.000` Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C $5,235,000* SEWER REVENUE REFUNDING BONDS, SERIES 2017B AMOUNTS*, MATURITIES, INTEREST RATES, PRICE OR YIELDS AND CUSIP NUMBERS Principal Due Interest Price or CUSIP Principal Due Interest Price or CUSIP Amount` July 1 Rate Yield NUMBER(1) Amount` JUIv 1 Rate Yield NUMBER(1) $275,000 ....................2018 _% _% $ 835,000 ................. 2021 % % 500,000 ....................2019 % % 2,770,000 ................. 2022 855,000 ....................2020 Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. Issue: $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B Principal Due: Serially each July 1, commencing July 1, 2018 through 2022, as detailed above. Optional Redemption: The Sewer Bonds are not subject to optional redemption prior to maturity. Security: The Sewer Bonds and the interest thereon shall be payable solely and only out of the Net Revenues (defined herein) of the City's Municipal Sewer System (defined herein) and from amounts on deposit in the Sewer Sinking Fund and Sewer Reserve Fund (each as defined herein). The Sewer Bonds shall not be a debt of nor a charge against the State of Iowa nor of the City within the meaning of any constitutional or statutory limitation or provision and are not payable in any manner by taxation, and the City shall not be liable by reason of the failure of the Net Revenues to be sufficient for the payment of the Sewer Bonds. The City will furnish the written approving opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, evidencing legality of the Sewer Bonds and that the interest thereon is exempt from Federal income taxes as and to the extent discussed under the heading "TAX MATTERS" herein. Purpose: The proceeds of the Sewer Bonds are expected to be used to: (i) currently refund the City's outstanding Sewer Revenue Refunding Capital Loan Notes, Series 2009A, and (ii) pay the costs of issuing the Sewer Bonds. See "THE PLAN OF FINANCING" herein. Tax Matters: Ahlers & Cooney, P.C., Des Moines, Iowa, will provide an opinion as to the tax exemption of the Sewer Bonds as discussed under "TAX MATTERS" in this Official Statement. Interest on the Sewer Bonds is not exempt from present State of Iowa income taxes. See APPENDIX C for a draft form of legal opinion for the Sewer Bonds. *Subject to principal adjustment in accordance with the Official Terms of Offering. (I) CUSIP numbers appearing in this Official Statement have been provided by the CUSIP Service Bureau, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a part of McGraw Hill Financial Inc. The City is not responsible for the selection of CUSIP numbers and makes no representation as to their correctness on the Bonds or as set forth above. City oflowa City, Johnson County, Iowa $5,235.000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000' Water Revenue Bonds, Series 2017C $5,910,000* WATER REVENUE BONDS, SERIES 2017C AMOUNTS*, MATURITIES, INTEREST RATES, PRICE OR YIELDS AND CUSIP NUMBERS Principal Due Interest Price or CUSIP Principal Due Interest Price or CUSIP Amount' July 1 Rate Yield NUMBER(f) Amount' July 1 Rate Yield NUMBERM $610,000 ....................2018 _% % $ 725,000 ................. 2022 _% 635,000 ....................2019 % % 1,225,000................. 2023 % 665,000 ....................2020 _% _% 800,000 ................. 2024 / _% 695,000 ....................2021 % % 555,000 ................. 2025 % Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shalt be on the same schedule as above. Issue: $5,910,000* Water Revenue Bonds, Series 2017C Principal Due: Serially each July 1, commencing July 1, 2018 through 2025, as detailed above. Optional Redemption: The Water Bonds maturing on or after July 1, 2023, are callable at the option of the City on any date on or after July 1, 2022, at a price of par plus accrued interest. See "OPTIONAL REDEMPTION" herein. Security: The Water Bonds and the interest thereon shall be payable solely and only out of the Net Revenues (defined herein) of the City's Municipal Water System (defined herein) and from amounts on deposit in the Water Sinking Fund and Water Reserve Fund (each as defined herein). The Water Bonds shall not be a debt of nor a charge against the State of Iowa nor of the City within the meaning of any constitutional or statutory limitation or provision and are not payable in any manner by taxation, and the City shall not be liable by reason of the failure of the Net Revenues to be sufficient for the payment of the Water Bonds. The City will furnish the written approving opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, evidencing legality of the Water Bonds and that the interest thereon is exempt from Federal income taxes as and to the extent discussed under the heading "TAX MATTERS" herein. Purpose: The proceeds of the Water Bonds are expected to be used to: (i) provide funds for extending, improving and equipping the water utility of the City, including water plant roof replacement and water distribution building repairs; (ii) currently refund the City's outstanding Water Revenue Refunding Capital Loan Notes, Series 200913; and (iii) to pay the costs of issuing the Water Bonds. See "THE PLAN OF FINANCING" herein. Tax Matters: Ahlers & Cooney, P.C., Des Moines, Iowa, will provide an opinion as to the tax exemption of the Water Bonds as discussed under "TAX MATTERS" in this Official Statement. Interest on the Water Bonds is not exempt from present State of Iowa income taxes. See APPENDIX C for a draft form of legal opinion for the Water Bonds. -Subject to principal adjustment in accordance with the Official Terms of Offering. (1) CUSIP numbers appearing in this Official Statement have been provided by die CUSIP Service Bureau, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a part of McGraw Hill Financial Inc. The City is not responsible for the selection of CUSIP numbers and makes no representation as to thein correctness on the Bonds or as set forth above. City oflowa City, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* {Vater Revenue Bonds, Series 2017C CITY OF IOWA CITY Johnson, County, Iowa Jim Throgmorton Mayor Kinglsey Botchway II Mayor Pro Tem Council Members Rockne Cole Terry Dickens Pauline Taylor Officials Geoff Frain City Manager Dennis Bockenstedt Finance Director John Thomas BONDHOLDERS' RISKS Secondary Market Susan Mims Julie Voparil Deputy City Clerk Eleanor M. Dilkes, Esq. CityAttorney There can be no guarantee that 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, and secondary marketing practices in connection with a particular bond or note 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. Ratings Loss Moody's Investors Service, Inc. ("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 that the rating will 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. City of Iowa City, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000- Water Revenue Bonds, Series 2017C Rating agencies are currently not regulated by any regulatory body. Future regulation of rating agencies could materially alter the methodology, rating levels, and types of ratings available, for example, and these changes, if ever, could materially affect the market value of the Bonds. Forward -Looking Statements This 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 Official Statement, the words "estimate," "forecast," "intend," "expect' and similar expressions identify forward-looking statements. Any forward-looking statement is subject to uncertainty. Accordingly, such statements are subject to risks that could cause actual results to differ, possibly materially, from those contemplated in such forward-looking statements. Inevitably, some assumptions used to develop forward-looking statements will not be realized or unanticipated events and circumstances may occur. Therefore, investors should be aware that there are likely to be differences between forward looking statements and the actual results. These differences could be material and could impact the availability of funds of the City to pay debt service when due on the Bonds. Tax Matters and Loss of Tax Exemption As discussed under the heading "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 prepayment and would remain outstanding until maturity or until prepaid under the prepayment provisions contained in the Bonds, and there is no provision for an adjustment of the interest rate on the Bonds. It is also possible that actions of the City after the closing of the Bonds will alter the tax status of the Bonds, and, in the extreme, remove the tax exempt status from the Bonds. In that instance, the Bonds are not subject to mandatory prepayment, and the interest rate on the Bonds does not increase or otherwise reset. A determination of taxability on the Bonds, after closing of the Bonds, could materially adversely affect the value and marketability of the Bonds. DTC -Beneficial Owners Beneficial Owners of the Bonds may experience some delay in the receipt of distributions of principal of and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC will credit such distributions to the accounts of the Participants which will thereafter credit them to the accounts of the Beneficial Owner either directly or indirectly through indirect Participants. Neither the City nor the Paying Agent will have any responsibility or obligation to assure that any such notice or payment is forwarded by DTC to any Participants or by any Participant to any Beneficial Owner. In addition, since transactions in the Bonds can be effected only through DTC Participants, indirect participants and certain banks, the ability of a Beneficial Owner to pledge the Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will be permitted to exercise the rights of registered Owners only indirectly through DTC and the Participants. See APPENDIX B — Describing Book -Entry Only Issuance. City oflowa City, Johnson County, lova $5.135,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000` Water Revenue Bands, Series 2017C Federal Tax Legislation From time to time, there are Presidential proposals, proposals of various federal committees, and legislative proposals are pending in Congress that could, 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 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. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted and there can be no assurance that such proposals will not apply to 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. Continuing Disclosure A failure by the City to comply with the continuing disclosure (see "CONTINUING DISCLOSURE" herein) will not constitute an event of default on the Bonds. Any such failure must be reported in accordance with Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and may adversely affect the transferability and liquidity of the Bonds and their market price. Suitability of Investment The interest rate borne by the Bonds is intended to compensate the investor for assuming the risk of investing in the Bonds. Each prospective investor should carefully examine this Official Statement and its own financial condition to make a judgment as to its ability to bear the economic risk of such an investment, and whether or not the Bonds are an appropriate investment for such investor. Bankruptcy The rights and remedies of the Bondholders 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 creditors' rights, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against local governments. The various opinions of counsel to be delivered with respect to the Bonds will be similarly qualified. State and Federal Funding There can be no assurance that significant state and local funding to the City will not be interrupted, reduced or withheld under existing presidential executive orders and future federal or state legislation related to immigration and domestic security. The City does not believe such orders and proposed legislation will apply to it. However, due to the broad discretion and authority included in existing presidential executive orders, and the lack of certainty as to the form any future federal and state legislation might take, it is not possible to assess the likelihood of applicability, or the impact such a designation would have upon the ability of the City to provide services at current levels. Other Factors An investment in the Bonds involves an element of risk. 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 Official Statement and the Appendices hereto. City of Iowa City, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C PAYMENT OF AND SECURITY FOR THE SEWER BONDS Introduction This section is a summary of security provisions for the Sewer Bonds. A detailed statement of security provisions is contained in the resolution for the Sewer Bonds (the "Sewer Bond Resolution"), which is available upon request. Source of Payment The Sewer Bonds are NOT general obligations of the City, but are payable solely and only from a pledge of net revenues of the Municipal Sewer System (the "Sewer System"). The Sewer Bonds are being issued by the City on a parity with the City's $8,660,000 Sewer Revenue Refunding Capital Loan Notes, Series 2009A dated May 18, 2009 of which $5,770,000 is outstanding; the City's $15,080,000 Sewer Revenue Refunding Capital Loan Notes, Series 2010A dated April 15, 2010 of which $5,155,000 is outstanding; the City's $9,360,000 Sewer Revenue Refunding Capital Loan Notes, Series 2016C of which $9,360,000 is outstanding (collectively the "Sewer Parity Obligations"). The City pledges a lien on the net revenues of the Sewer System for payment of principal and interest on the Sewer Bonds and all outstanding Sewer Parity Obligations. Net revenues of the Sewer System means gross earnings of the Sewer System after deduction of current expenses. Current expenses means and includes the reasonable and necessary cost of operating, maintaining, repairing and insuring the Sewer System, including purchases at wholesale, if any salaries, wages, and costs of materials and supplies, but excluding depreciation and principal of and interest on the Sewer Bonds and any Sewer Parity Obligations or payments to the various funds established in the Sewer Bond Resolution and capital costs. Unpaid Sewer Charges As provided by Section 384.84, Subsection 1, City Code of Iowa, unpaid sewer charges constitute a lien upon the premises served by the Sewer System upon certification by the City to the County Treasurer that the rates or charges are past due. The lien has equal precedence with ordinary taxes, may be certified to the County Treasurer and collected in the same manner as taxes, and is not diversified by a judicial sale. Sewer Rate Covenant On or before the beginning of each fiscal year, the City covenants to adopt or continue in effect rates for all services rendered by the Sewer System determined to be sufficient to produce net revenues for the next succeeding fiscal year adequate to pay principal and interest requirements and create reserves as provided in the resolution for the Sewer Bonds by not less than 110% of the principal and interest requirements of the fiscal year. No free use of the Sewer System by the City or any department, agency or instrumentality of the City shall be permitted except upon the determination of the City that the rates and charges otherwise in effect are sufficient to provide net revenues of the Sewer System at least equal to the requirements listed herein. Sewer Reserve Fund The City covenants to establish and maintain a sewer debt service reserve fund (the "Sewer Reserve Fund") in an amount equal to lesser of. (a) the maximum annual amount of the principal and interest coming due on the Sewer Bonds and Sewer Parity Obligations; (b) 10% of the stated principal amount of the Sewer Bonds and Sewer Parity Obligations; and (c) 125% of the average annual principal and interest coming due on the Sewer Bonds and Sewer Parity Obligations. Currently, the City meets the Sewer Reserve Fund requirement. Upon issuance of the Sewer Bonds, the Sewer Reserve Fund will be reduced to approximately $3,132,162.43 which represents 10% of the state principal coming due on the Sewer Bonds and Sewer Parity Obligations. City oflowa City, Johnson County, Iowa $5,135,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000` Water Revenue Bonds, Series 2017C Sewer Improvement Fund The City covenants to maintain a sewer revenue improvement fund (the "Sewer Improvement Fund"). The minimum amount to be deposited in the Sewer Improvement Fund each month shall be $20,000; provided, however, that when the amount of such deposits in the fund shall equal or exceed $2,000,000, no further monthly deposits need be made into the Sewer Improvement Fund except to maintain it at such level. Money in the Sewer Improvement Fund shall be used solely for the purpose of paying principal of or interest on the Sewer Bonds and Sewer Parity Obligations when there shall be insufficient money in the sinking fund and the Sewer Reserve Fund; and to the extent not required for the foregoing, to pay the cost of extraordinary maintenance expenses or repairs, renewals and replacements not included in the annual budget of revenues and current expenses, payment of rentals on any part of the Sewer System or payments due for any property purchased as a part of the Sewer System, and for capital improvements to the Sewer System. Whenever it shall become necessary to so use money in the Sewer Improvement Fund, the payments required above shall be continued or resumed until it shall have been restored to the required minimum amount. Sewer Additional Bonds Test The City reserves the right and privilege to issue additional revenue obligations payable from the same source and ranking on a parity with the Sewer Bonds and Sewer Parity Obligations for the purpose of refunding any outstanding Sewer Bonds, Sewer Parity Obligations or general obligation bonds, or to make extensions, additions, improvements or replacements to the Sewer System payable from the net revenues of the Sewer System, but only if there will have been procured and filed with the City Clerk a statement from an independent auditor, independent financial consultant or a consulting engineer, not a regular employee of the City, reciting the opinion based upon necessary investigations that the net revenues of the Sewer System for the preceding fiscal year (with adjustments as provided for in the resolution for the Sewer Bonds) were equal to at least 1.25 times the maximum amount that will be required in any fiscal year prior to the longest maturity of any of the Sewer Bonds and Sewer Parity Obligations for both principal of and interest on all Sewer Bonds and Sewer Parity Obligations then outstanding which are payable from the net revenues of the Sewer System and the additional obligations then proposed to be issued. Any principal and interest falling due on the first day of a fiscal year shall be deemed a requirement of the immediately preceding fiscal year. The preceding fiscal year shall be the most recently completed fiscal year for which audited financial statements prepared by a certified public accountant are issued and available, but in no event a fiscal year which ended more than eighteen months prior to the date of issuance of additional obligations. DESCRIPTION OF THE MUNICIPAL SEWER SYSTEM Management And Administration Sewer System and Management: The City operates a Municipal Sewer System (the "Sewer System") consisting of approximately 300 miles of sanitary sewers, 18 lift stations and a wastewater treatment plant. The Sewer System is operated under the direction of Mr. Ron Knoche, Public Works Director; Mr. Tim Wilkey, Division Superintendent; and Mr. Roger Overton, Assistant Superintendent. There are a total of 24.65 (FTE) employees who work in the Wastewater Division. Wastewater Treatment Plants: The north wastewater treatment plant (the "North Plant") was constructed in 1935 and the south wastewater treatment plant (the "South Plant") was completed in 1990. Both were upgraded in 2002, and the South Plant was expanded in 2014. The North and South Plants were connected in 1998 and after 79 years of being in service the North Plant was decommissioned in 2014. The City utilized federal and state grants to fund a flood recovery and mitigation project to decommission the North Plant by simultaneously expanding the South Plant. Currently, the City is diverting all wastewater treatment to the South Plant and control operations remotely through supervisory control and data acquisition ("SCADA") computer systems. The South Plant system design has a maximum daily treatment capacity of 43.30 million gallons per day ("MGD") and is in compliance with Federal clean water standards. 10 City oflowa City, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C Billings and Collections: Customers are billed monthly on a combined utility statement which includes charges for sewer, water, solid waste, and curbside recycling. Under present City policy and City ordinances, utility bills are due when received but contain a delinquency date which provides 15 days for payment. If payment is not made in full within 22 days, a notice is mailed which allows 25 calendar days before service is disconnected. The City's bad debt write-offs Have been less than 0.2% of gross revenues for the past three years. Sewer System Rates And Charges 2015: The following Sewer System rates and charges were approved by the City Council and became effective July 1, Monthly Sewer Service Charge Minimum (includes up to the first 100 cubic feet (c.f.)) Monthly Usage in excess of 100 cubic feet (c.f.) The following table shows historical rate increases over the last ten fiscal years. Sewer Rate Increases(]) Fiscal Year Rate Chance 2007 .................................................... 8% 2008 .................................................... 0% 2009 .................................................... 5% 2010 .................................................... 0% 2011 .................................................... 0% 2012 .................................................... 0% 2013 .................................................... 0% 2014 .................................................... 0% 2015 .................................................... 0% 2016 .................................................... 0% Sales History and Sewer System Charges(]) Fiscal Sewer Sales Sewer System Year Cubic Feet Sold Charges 2007 ..................................... 315,199,203 $11,084,369 2008 ..................................... 285,492,596 12,221, 769 2009 ..................................... 276,455,246 12,499, 949 2010 ..................................... 265, 375, 857 12, 541, 905 2011 ..................................... 280,303,237 12,748,695 2012 ..................................... 282,134, 840 12, 784, 321 2013 ..................................... 285, 472, 392 12, 883, 641 2014 ..................................... 269,494,125 12, 382,031 2015 ..................................... 266,830,947(2) 12,278,153 2016 ..................................... 270,547,701(2) 12,022,203 Notes: (1) Source: the City. (2) Beginning in March 2015 the amount includes unbilled usage in totals. Number of Sewer System Customers(]) Fiscal Year 2012 2013 2014 2015 2016 Note: (1) Source: the City. 11 Number of Sewer Svstem Customers 23,529 24,059 24,389 24,533 25,085 $8.15 $3.99 City of Iowa City, Johnson County, Iowa $5,135,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000- Water Revenue Bonds, Series 2017C Larger Sewer System Customers(]) Customer Name University of Iowa.......................................................... Proctor & Gamble.......................................................... Iowa City Landfill............................................................ Iowa City Veterans Health Care System ........................ MercyHospital............................................................... Dolphin Lake Point (Rus Properties Management.......... University of Iowa Mayflower .......................................... Campus Apartments...................................................... CCAL 100 Hwk Ridge Drive ........................................... Mark IV Apartments....................................................... Total............................................................................ Total Sewer System Customers Note: (1) Source: the City. $12,022,203 SEWER SYSTEM DEBT INFORMATION After issuance of the Sewer Bonds and refunding of the Sewer Refunded Notes, the City will have outstanding $20,275,000* principal amount of sewer revenue debt. The City does not expect to issue any additional sewer revenue debt in calendar year 2017. Sewer System Revenue Bonded Debt(]) (Principal Only) Series 2009A........................................................................ Fiscal Year 2016 Series 2010A........................................................................ Charges Rank Percentage $ 1,900,317 1 15.81% 893,069 2 7.43% 219,432 3 1.83% 119,193 4 0.99% 102,693 5 0.85% 76,609 6 0.64% 73,827 7 0.61% 72,228 8 0.60% 68,909 9 0.57% 58.512 10 0.49% $ 3,584,789 17.66% 29.82% $12,022,203 SEWER SYSTEM DEBT INFORMATION After issuance of the Sewer Bonds and refunding of the Sewer Refunded Notes, the City will have outstanding $20,275,000* principal amount of sewer revenue debt. The City does not expect to issue any additional sewer revenue debt in calendar year 2017. Sewer System Revenue Bonded Debt(]) (Principal Only) Series 2009A........................................................................ $ 5,770,000 Series 2010A........................................................................ 5,155,000 Series 2016C........................................................................ 9,360,000 The Sewer Bonds(2)............................................................ 5,235,000 Less: The Sewer Refunded Notes(2)................................... (5.245.000) Total(2)............................................................................... $20,275,000 Notes: (1) Source: the City. (2) Subject to change. Sewer System Revenue Bonded Debt(]) (Principal Only) Fiscal Total Outstanding The Less: the Total Sewer Year Ending Series Series Series Sewer Revenue Sewer Sewer Revenue Cumulative Retirement(2) June 30 2009A 2010A 2016C Debt Bonds(2) Refunded Notes(2) Debt(2) Amount Percent 2018....... $ 525,000 $1,215,000 $1,840,000 $ 3,580,000 $ 0 ($ 0) $ 3,580,000 $ 3,580,000 17.66% 2019....... 550,000 1,270,000 1,920,000 3,740,000 275,000 (550,000) 3,465,000 7,045,000 34.75% 2020....... 575,000 1,310,000 2,010,000 3,895,000 500,000 (575,000) 3,820,000 10,865,000 53.59% 2021....... 605,000 1,360,000 1,765,000 3,730,000 855,000 (605,000) 3,980,000 14,845,000 73.22% 2022....... 635,000 0 1,825,000 2,460,000 835,000 (635,000) 2,660,000 17,505,000 86.34% 2023....... 665,000 0 0 665,000 2,770,000 (665,000) 2,770,000 20,275,000 100.00% 2024....... 700,000 0 0 700,000 0 (700,000) 0 20,275,000 100.00% 2025....... 740,000 0 0 740,000 0 (740,000) 0 20,275,000 100.00% 2026....... 775.000 0 0 775.000 0 (775.000) 0 20,275,000 100.00% Total..... $5,770,000 $5,155,000 $9,360,000 $20,285,000 $5,235,000 ($5,245,000) $20,275,000 Notes: (1) Source: the City. (2) Subjectto change. 12 City oflowa City, Johnson County, lowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5.910,000' Water Revenue Bonds, Series 2017C Historical Sewer Debt Service Coverage(]) Fiscal Year Ended June Sewer System Revenue Bonded Debt Service(]) Fiscal 2012 Total Outstanding The Less: the Total Sewer Year Ending Series Series Series Sewer Revenue Sewer Sewer Revenue June 30 2009A 2010A 2016C Debt Bonds(2) Refunded Notes(2) Debt(21 2018..... $ 786,525 $1,396,900 $ 2,159,350 $ 4,342,775 $ 73,584 $ (125,213) $ 4,291,147 2019....... 788,050 1,402,200 2,164,150 4,354,400 407,405 (788,050) 3,973,755 2020....... 787,738 1,390,600 2,175,550 4,353,888 624,030 (787,738) 4,190,180 2021....... 791,188 1,387,200 1,855,050 4,033,438 963,145 (791,188) 4,205,395 2022....... 793,288 0 1,852,375 2,645,663 922,030 (793,288) 2,774,405 2023....... 792,375 0 0 792,375 2,808,088 (792,375) 2,808,088 2024....... 793,250 0 0 793,250 0 (793,250) 0 2025....... 797,250 0 0 797,250 0 (797,250) 0 2026....... 794,375 0 0 794,375 0 (794,375) 0 Total... $7,124,038 $5,576,900 $10,206,475 $22,907,413 $5,798,282 $(6,462,725) $22,242,969 Notes: (1) Source: the City. (2) Subject to change. Historical Sewer Debt Service Coverage(]) Principal and Interest Paid During the year............ $6,308,000 Annual Coverage ................................................... 1.19x Note: (1) Source: the City Introduction $6,412,000 $4,678,000 $4,675,000 $4,695,000 1.24x 1.52x 1.29x 1.31x PAYMENT OF AND SECURITY FOR THE WATER BONDS This section is a summary of security provisions. A detailed statement of security provisions is contained in the resolution for the Water Bonds (the "Water Bond Resolution"), which is available upon request. Source of Payment The Water Bonds are not general obligations of the City, but are payable solely and only from a pledge of net revenues of the Municipal Water System (the "Water System"). The Water Bonds will be issued on parity with the $9,750,000 Water Revenue Refunding Capital Loan Notes, Series 2009B dated May 18, 2009 of which $6,310,000 is outstanding; the $4,950,000 Water Revenue Refunding Notes, Series 2012C dated June 20, 2012 of which $3,085,000 is outstanding; and the $3,650,000 Water Revenue Refunding Capital Loan Notes, Series 2016D dated June 16, 2016 of which $3,650,000 is outstanding (collectively the "Water Parity Obligations"). The City pledges a lien on the net revenues of the Water System for payment of principal and interest on the Water Bonds and all outstanding Water Parity Obligations. Net revenues of the Water System means gross earnings of the Water System after deduction of current expenses. Current expenses means and includes the reasonable and necessary cost of operating, maintaining, repairing and insuring the Water System, including purchases at wholesale, if any salaries, wages, and costs of materials and supplies, but excluding depreciation and principal of and interest on the Water Bonds and any Water Parity Obligations or payments to the various funds established in the Water Bond Resolution and capital costs. 13 Fiscal Year Ended June 30 2012 2013 2014 2015 2016 Operating Revenue ............................................... $13,715,000 $13,301,000 $12,835,000 $12,620,000 $12,681,000 Operating Expenses .............................................. 5.663.000 5,340,000 5.708.000 6.574.000 6.513,000 Net Revenue Available for Debt Service ................ $ 7,512,000 $ 7,961,000 $ 7,127,000 $ 6,046,000 $ 6,168,000 Principal and Interest Paid During the year............ $6,308,000 Annual Coverage ................................................... 1.19x Note: (1) Source: the City Introduction $6,412,000 $4,678,000 $4,675,000 $4,695,000 1.24x 1.52x 1.29x 1.31x PAYMENT OF AND SECURITY FOR THE WATER BONDS This section is a summary of security provisions. A detailed statement of security provisions is contained in the resolution for the Water Bonds (the "Water Bond Resolution"), which is available upon request. Source of Payment The Water Bonds are not general obligations of the City, but are payable solely and only from a pledge of net revenues of the Municipal Water System (the "Water System"). The Water Bonds will be issued on parity with the $9,750,000 Water Revenue Refunding Capital Loan Notes, Series 2009B dated May 18, 2009 of which $6,310,000 is outstanding; the $4,950,000 Water Revenue Refunding Notes, Series 2012C dated June 20, 2012 of which $3,085,000 is outstanding; and the $3,650,000 Water Revenue Refunding Capital Loan Notes, Series 2016D dated June 16, 2016 of which $3,650,000 is outstanding (collectively the "Water Parity Obligations"). The City pledges a lien on the net revenues of the Water System for payment of principal and interest on the Water Bonds and all outstanding Water Parity Obligations. Net revenues of the Water System means gross earnings of the Water System after deduction of current expenses. Current expenses means and includes the reasonable and necessary cost of operating, maintaining, repairing and insuring the Water System, including purchases at wholesale, if any salaries, wages, and costs of materials and supplies, but excluding depreciation and principal of and interest on the Water Bonds and any Water Parity Obligations or payments to the various funds established in the Water Bond Resolution and capital costs. 13 City of Iowa City, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B 55,910,000' Water Revenue Bonds, Series 2017C Unpaid Water Charges As provided by Section 384.84, Subsection 1, City Code of Iowa, unpaid water charges constitute a lien upon the premises served by the Water System upon certification by the City to the County Treasurer that the rates or charges are past due. The lien has equal precedence with ordinary taxes, may be certified to the County Treasurer and collected in the same manner as taxes, and is not diversified by a judicial sale. Water Rate Covenant On or before the beginning of each fiscal year, the City covenants to adopt or continue in effect rates for all services rendered by the Water System determined to be sufficient to produce net revenues for the next succeeding fiscal year adequate to pay principal and interest requirements and create reserves as provided in the resolution for the Water Bonds but not less than 110% of the principal and interest requirements of the fiscal year. No free use of the Water System by the City or any department, agency or instrumentality of the City shall be permitted except upon the determination of the City that the rates and charges otherwise in effect are sufficient to provide net revenues of the Water System at least equal to the requirements listed herein. Water Reserve Fund The City covenants to establish and maintain a water debt service reserve fund (the "Water Reserve Fund") in an amount equal to lesser of. (a) the maximum annual amount of the principal and interest coming due on the Water Bonds and Water Parity Obligations; (b) 10% of the stated principal amount of the Water Bonds and Water Parity Obligations; and (c) 125% of the average annual principal and interest coming due on the Water Bonds and Water Parity Obligations. Currently, the City meets the Water Reserve Fund requirement. Upon issuance of the Water Bonds, the Water Reserve Fund will be reduced to approximately $1,909,691.13, which represents 10% of the stated principal amount of the Water Bonds and Water Parity Obligations. Water Improvement Fund The City covenants to maintain a water revenue improvement fund (the "Water Improvement Fund"). The minimum amount to be deposited in the Water Improvement Fund each month shall be $5,000; provided, however, that when the amount of such deposits in such fund shall equal or exceed $450,000, no further monthly deposits need be made into the Water Improvement Fund except to maintain it at such level. Money in the Water Improvement Fund shall be used solely for the purpose of paying principal of or interest on the Water Bonds and Water Parity Obligations when there shall be insufficient money in the sinking fund and the Water Reserve Fund; and to the extent not required for the foregoing, to pay the cost of extraordinary maintenance expenses or repairs, renewals and replacements not included in the annual budget of revenues and current expenses, payment of rentals on any part of the Water System or payments due for any property purchased as a part of the Water System, and for capital improvements to the Water System. Whenever it shall become necessary to so use money in the Water Improvement Fund, the payments required above shall be continued or resumed until it shall have been restored to the required minimum amount. The remainder of this page was left blank intentionally. IV City oflowa City, Johnson County, Iowa $5,135,000' Sewer Revenue Refunding Bonds, Series 1017B S5,910.000- Water Revenue Bonds, Series 2017C Water Additional Bonds Test The City reserves the right and privilege to issue additional revenue obligations payable from the same source and ranking on a parity with the Water Bonds and Water Parity Obligations for the purpose of refunding any outstanding Water Bonds, Water Parity Obligations or general obligation bonds outstanding, or to make extensions, additions, improvements or replacements to the Water System payable from the net revenues of the Water System, but only if there will have been procured and filed with the City Clerk a statement from an independent auditor, independent financial consultant or a consulting engineer, not a regular employee of the City, reciting the opinion based upon necessary investigations that the net revenues of the Water System for the preceding fiscal year (with adjustments as provided for in the resolution for the Water Bonds) were equal to at least 1.25 times the maximum amount that will be required in any fiscal year prior to the longest maturity of any of the Water Bonds and Water Parity Obligations for both principal of and interest on all Water Bonds and Water Parity Obligations then outstanding which are payable from the net revenues of the Water System and the additional obligations then proposed to be issued. Any principal and interest falling due on the first day of a fiscal year shall be deemed a requirement of the immediately preceding fiscal year. The preceding fiscal year shall be the most recently completed fiscal year for which audited financial statements prepared by a certified public accountant are issued and available, but in no event a fiscal year which ended more than eighteen months prior to the date of issuance of additional obligations. DESCRIPTION OF THE MUNICIPAL WATER SYSTEM Management And Administration Water System and Management: The City operates a Municipal Water System (the "Water System") consisting of approximately 273 miles of water mains, serveral wells and a treatment plant. The Water System is operated under the direction of Mr. Ron Knoche, Public Works Director; Mr. Kevin Slutts, Division Superintendent; and Mr. Johnathan Durst, Assistant Superintendent. The Water Division is comprised of five parts: Administration, Treatment Plant, Customer Service, Distribution, and Public Information/Education. There are a total of 32.0 (FTE) employees who work in the Water Division. This division serves about 74,200 people and has about 25,200 customer water accounts. The average daily use for fiscal year 2016 was approximately 5.46 million gallons per day (MGD). A peak flow of over 8.6 MGD was experienced during the summer of 2012. Water Sources The primary source of water for the City is the alluvial aquifer collector wells along the Iowa River. Four collector wells can provide approximately 10.5 MGD. Additional sources include two Jordan aquifer wells which can provide 2.0 MGD; three Silurian aquifer wells which can provide 1.0 MGD; a sand pit that can provide 1.0 MGD; a river intake that can provide 3.0 MGD; for a total of approximately 16.7 MGD maximum capacity. Water Treatment Processes The facilities include one treatment plant (constructed in 2003) located at 80 Stephen Atkins Drive. The plant is a surface water plant design that includes aeration, lime softening (coagulation/flocculation/sedimentation), and granular activated carbon filtration processes with fluoridation and free chlorination. The Grade IV Water Treatment Facility houses an operations team that performs over 230 water quality tests per day in house and collects regulatory samples for testing at the University Hygienic Laboratory. This testing ensures that Iowa City's drinking water meets all IDNR and EPA Safe Drinking Water Act Standards. 15 City ofloiva City, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C Distribution System The water flows through approximately 273 miles of water mains and includes over 22,000 service connections. The distribution piping consists of cast iron, ductile iron and plastic mains that range in size from 2" to 30". The treatment plant site has effective water storage capacity of 1.75 million gallons of water; in addition there are four remote ground storage reservoirs (with pumping stations) that add remote effective storage capacity of up to 6.0 million gallons of water. The Water System also provides for fire protection with approximately 3,599 public and private hydrants located throughout the community. Billing and Collections Customers are billed monthly on a combined utility statement which includes charges for sewer, water, solid waste, and curbside recycling. Under present City policy and City ordinances, utility bills are due when received but contain a delinquency date which provides 15 days for payment. If payment is not made in full within 22 days, a notice is mailed which allows 25 calendar days before service is disconnected. The City's bad debt write-offs have been less than 0.2% of gross revenues for the past three years. Water System Rates and Charges The following rates and charges were effective July 1, 2015. Water Service Charge Minimums(l) (Includes up to the fust 100 cubic feet (c.f)) Meter Size Charge Meter Size Chame 5/8 ...................... $ 7.07 2 .................... $ 24.41 3/4.. ..................... 7.72 3 ..................... 45.11 1.. ....................... 9.10 4 ..................... 78.69 1-1/2...................... 18.15 6.................... 158.33 Note: (1) Source: the City. Monthly Usage in excess of 100 cubic feet (c.f.)(1) 101 c.f. - 3,000 c.f...................$3.30 per 100 c.f. 3,001 c.f. and over..................$2.37 per 100 c.f. Note: (1) Source: the City Single Purpose Meter Charges(]) First 100 c.f......................................... Minimum Monthly Charge Usage in excess of 100 c.f.................. $3.30 per 100 c.f. Note: (1) Source: the City. The remainder of this page was left blank intentionally. City oflowa City, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000- Water Revenue Bonds, Series 2017C Changes in water rates over the last ten fiscal years: Fiscal Year 2007..... 2008..... 2009..... 2010..... 2011 ..... 2012..... 2013..... 2014..... 2015..... 2016..... Note: Water Rate Changes(]) (1) Source: the City. Rate Change (5%) 0% 0% 0% 0% 0% 0% 0% 5% 5% Sales History and Water System Charges(]) Fiscal Water Sales Water System Year Cubic Feet Sold Charges 2007 ................................... 261,072,632 ............................. $ 8,414,310 2008 ................................... 249,361,929 ............................. 7,976,536 2009 ................................... 234,804,167 ............................. 7,497,903 2010 ................................... 234,342, 825 ............................. 7,568,378 2011 ................................... 236, 838, 370 ............................. 7,661,898 2012 ................................... 246, 618.257 ............................. 7,953,738 2013 ................................... 254.616, 773 ............................. 8,194, 467 2014 ................................... 239,790,719 ............................. 7.778, 364 2015(2) .............................. 240,423,612 ............................. 8,161.522 2016(2) .............................. 255,524,943 ............................. 8,758,683 Notes: (1) Source: the City. (2) Beginning in March 2015 the amounts include unbilled usage. Water System Customers by Classification(l)(2) Classification FY2012 FY2013 FY2014 FY2015 4 FY2016 Residential ............................. 24,086 24,442 24,790 23,089 23,638 Commercial ........................... 1,489 1,491 1,491 1,409 1,415 Industrial ................................ 15 15 15 14 14 Other(3)................................. 200 204 202 135 131 Total Meters ......................... 25,790 26,152 26,498 24,647 25,198 Notes: (1) Source: the City. (2) Represents the number of meters customers billed as of the end of the fiscal year. (3) Other meters consist of rural, schools, government, churches and City meters. (4) Implemented a new utility billing system during Fiscal Year 2015, which consolidated customers with multiple meters. The remainder of this page was left blank intentionally. 17 City oflowa City, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C Larger Water System Customers(1) Customer Name Proctor & Gamble .................................................... Iowa City Veterans Health Care System .................. MercyHospital......................................................... Campus Apartments ................................................ Mark IV Apartments ................................................. Dolphin Lake Point (Rus Properties Management)... University of Iowa (Mayflower Apartments) .............. Iowa City Community School District ........................ CCAL 100 Hawk Ridge Drive ................................... Oaknoll Retirement Residence ................................. Total...................................................................... Total Water System Customers Note: (1) Source: the City. $8,758,683 WATER SYSTEM DEBT INFORMATION After issuance of the Water Bonds and refunding the Water Refunded Notes, the City will have outstanding $13,230,000* principal amount of general obligation debt. The City does not expect to issue additional water revenue debt in calendar year 2017. Water System Revenue Bonded Debt(]) (Principal Only) Series 2009B........................................................................ Fiscal Year 2016 Series2012C........................................................................ Charges Rank Percentage $ 673,690 1 7.69% 104,250 2 1.19% 64,349 3 0.73% 61,112 4 0.70% 53,473 5 0.61% 50,139 6 0.57% 46,061 7 0.53% 43,465 8 0.50% 39,301 9 0.45% 37.955 10 0.43°/ $1,173,795 11.00% 13.40% $8,758,683 WATER SYSTEM DEBT INFORMATION After issuance of the Water Bonds and refunding the Water Refunded Notes, the City will have outstanding $13,230,000* principal amount of general obligation debt. The City does not expect to issue additional water revenue debt in calendar year 2017. Water System Revenue Bonded Debt(]) (Principal Only) Series 2009B........................................................................ $ 6,310,000 Series2012C........................................................................ 3,085,000 Series 2016D........................................................................ 3,650,000 The Water Bonds(2)............................................................. 5,910,000 Less: the Water Refunded Notes(2).................................... (5.725.000) Total(2)............................................................................... $13,230,000 Notes: (1) Source: the City. (2) Subject to change. Water System Revenue Bonded Debt(]) (Principal Only) Fiscal Total Outstanding The Less: the Total Water Year Ending Series Series Series Water Revenue Water Water Refunded Revenue Cumulative Retirement(2) June 30 20098 2012C 2016D Debt Bonds(2) Notes(2) Debt(2) Amount Percent 2018.....$ 585,000 $ 490,000 $ 380,000 $ 1,455,000 $ 0 $ (0) $ 1,455,000 $ 1,455,000 11.00% 2019....... 610,000 495,000 405,000 1,510,000 610,000 (610,000) 1,510,000 2,965,000 22.41% 2020....... 635,000 510,000 420,000 1,565,000 635,000 (635,000) 1,565,000 4,530,000 34.24% 2021....... 665,000 520,000 445,000 1,630,000 665,000 (665,000) 1,630,000 6,160,000 46.56% 2022....... 695,000 530,000 465,000 11690,000 695,000 (695,000) 11690,000 7,850,000 59.33% 2023....... 725,000 540,000 490,000 1,755,000 725,000 (725,000) 1,755,000 9,605,000 72.60% 2024....... 760,000 0 520,000 1,280,000 1,225,000 (760,000) 1,745,000 11,350,000 85.79% 2025....... 800,000 0 525,000 1,325,000 800,000 (800,000) 1,325,000 12,675,000 95.80% 2026....... 835,000 0 0 835.000 555,000 (835.000) 555.000 13,230,000 100.00% Total ... $6,310,000 $3,085,000 $3,650,000 $13,045,000 $5,910,000 $(5,725,000) $13,230,000 Notes: (1) Source: the City. (2) Subject to change. i8 City oflowa City, Johnson County, Iowa $5,235, 000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000• Nater Revenue Bonds, Series 2017C Historical Water Debt Service Coverage(]) Outstanding Fiscal Year Ended June 30 Water System Revenue Bonded Debt Service(]) Fiscal Maturities 2012 Total Outstanding The Less: the Total Water Year Ending Series Series Series Water Revenue Water Water Refunded Revenue June 30 20098 2012C 2016D Debt Bonds(2) Notes(2) Debt Service(2) 2018.......$ 846,438 $ 543,640 $ 517,738 $ 1,907,816 $ 85,276 $ (0) $ 1,993,092 2019....... 847,538 541,253 523,113 1,911,903 760,530 (847,538) 1,824,895 2020....... 847,638 547,440 517,785 1,912,863 772,286 (847,638) 1,837,511 2021....... 850,806 547,140 520,863 1,918,809 787,163 (850,806) 1,855,165 2022....... 851,038 546,640 518,113 1,915,791 800,148 (851,038) 1,864,900 2023....... 849,088 545,670 519,238 1,913,996 811,144 (849,088) 1,876,051 2024....... 850,675 0 533,088 1,383,763 1,283,413 (850,675) 1,816,500 2025....... 855,575 0 529,594 1,385,169 828,650 (855,575) 1,358,244 2026....... 853.788 0 0 853.788 563,325 (853.788) 563.325 Total ..... $7,652,584 $3,271,783 $4,179,528 $15,103,895 $6,691,934 $(5,725,000) $14,989,683 Notes: (1) Source: the City. (2) Subject to change. Historical Water Debt Service Coverage(]) Note: (1) Source: the City GENERAL CITY INFORMATION Certain information describing the City is attached hereto as APPENDIX A. PLAN OF FINANCING The Sewer Bond proceeds will be used to currently refund certain outstanding sewer revenue notes of the City (the "Sewer Refunded Notes"). The Sewer Refunded Notes are described below. Sewer Revenue Refunding Capital Loan Notes, Series 2009A (Originally dated May 18, 2009) Refunded Outstanding Fiscal Year Ended June 30 Redemplion Redemption Maturities 2012 2013 2014 2015 2016 Operating Revenue ............................................... $8,649,000 $9,342,000 $8,613,000 $8,715,000 $9,323,000 Operating Expenses .............................................. 5.653,000 6.348,000 5,818,000 5,632.000 5.387.000 Net Revenue Available for Debt Service ................ $2,996,000 $2,994,000 $2,795,000 $3,083,000 $3,936,000 Principal and Interest Paid During the year............ $2,061,000 $1,603,000 $1,985,000 $1,990,000 $2,294,000 Annual Coverage ................................................... 1.45x 1.87x 1.41x 1.55x 1.72x Note: (1) Source: the City GENERAL CITY INFORMATION Certain information describing the City is attached hereto as APPENDIX A. PLAN OF FINANCING The Sewer Bond proceeds will be used to currently refund certain outstanding sewer revenue notes of the City (the "Sewer Refunded Notes"). The Sewer Refunded Notes are described below. Sewer Revenue Refunding Capital Loan Notes, Series 2009A (Originally dated May 18, 2009) Refunded Outstanding Amount Redemplion Redemption Maturities Amount Refunded Price Date 7/1/18 .......................... $550,000 $550,000 100% 07/01/17 7/1/19 .......................... 575,000 575,000 100% 07/01/17 7/1/20 .......................... 605,000 605,000 100% 07/01/17 7/1/21 .......................... 635,000 635,000 100% 07/01/17 7/1/22 .......................... 665,000 665,000 100% 07/01/17 7/1/23 .......................... 700,000 700,000 100% 07/01/17 7/1/24 .......................... 740,000 740,000 100% 07/01/17 7/1/25 .......................... 775,000 775,000 100% 07/01/17 Remaining Sewer Bond proceeds will be used to pay the costs of issuing the Sewer Bonds. 19 City oflowa City. Johnson County, Iowa S5,235.000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000' (Yater Revenue Bonds, Series 2017C The Water Bond proceeds will be used to currently refund certain outstanding water revenue notes of the City (the "Water Refunded Notes"). The Water Refunded Notes are described below. Water Revenue Refunding Capital Loan Notes, Series 2009B (Originally dated May 18, 2009) Refunded Outstanding Amount Redemption Redemption Maturities Amount Refunded Price Date 7/1/18 .......................... $610,000 $610,000 100% 07/01/17 7/1/19 .......................... 635,000 635,000 100% 07/01/17 7/1/20 .......................... 665,000 665,000 100% 07/01/17 7/1/21 .......................... 695,000 695,000 100% 07/01/17 7/1/22 .......................... 725,000 725,000 100% 07/01/17 7/1/23 .......................... 760,000 760,000 100% 07/01/17 7/1/24 .......................... 800,000 800,000 100% 07/01/17 7/1/25 .......................... 835,000 835,000 100% 07/01/17 Remaining Water Bond proceeds will be used to: (i) provide funds for extending, improving and equipping the water utility of the City, including water plant roof replacement and water distribution building repairs; and (ii) to pay the costs of issuing the Water Bonds. SEWERAGE SYSTEM AND WATER SYSTEM FINANCIAL INFORMATION Financial Reports The City's financial statements are audited annually by certified public accountants. The government -wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applicable to governments. See APPENDIX B for more detail. No Consent or Updated Information Requested of the Auditor The tables and excerpts (collectively, the "Excerpted Financial Information") contained in this "FINANCIAL INFORMATION" section are from the audited financial statements of the City, including the audited financial statements for the fiscal year ended June 30, 2016 (the "2016 Audit"). The 2016 Audit has been prepared by EideBailly, LLP, Certified Public Accountants, Dubuque, Iowa, (the "Auditor"), and received by the City Council. The City has not requested the Auditor to update information contained in the Excerpted Financial Information and the 2016 Audit; nor has the City requested that the Auditor consent to the use of the Excerpted Financial Information and the 2016 Audit in this Official Statement. The inclusion of the Excerpted Financial Information and the 2016 Audit in this Official Statement in and of itself is not intended to demonstrate the fiscal condition of the City since the date of the 2016 Audit. Questions or inquiries relating to financial information of the City since the date of the 2016 Audit should be directed to the City. Summary Financial Information The following tables are summaries and do not purport to be the complete audits, copies of which are available upon request. See APPENDIX B for the City's 2016 Audit. 20 City oflowa City, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bonds, Series 2017B 55, 910,000' {Vater Revenue Bonds. Series 2017C Sewer System Statement of Net Position(1) (Amounts Expressed in Thousands) Noncurrent Assets: $ 49 $ 380 Audited as of June 30 $ 180 $ 166 2012 2013 2014 2015 2016 ASSETS Equity in Pooled Cash and Investments .............................. $ 11,905 $ 10,074 $ 9,975 $ 9,861 Current Assets: Capital Assets 57 60 63 65 Equity in Pooled Cash and Investments ............................... $ 14,551 $ 15,655 $ 17,417 $ 16,643 $ 18,210 Receivables: Buildings............................................................................. 59,701 59,701 36,858 36,858 Accounts and Unbilled Usage ............................................. 1,408 1,350 1,272 1,413 1,454 Interest............................................................................... 341 418 31 68 81 Due from Other Governments ................................................ 717 6.959 2.108 907 2.036 Total Current Assets.......................................................... 17,017 24,382$ 0,828 19,031 21,781 Noncurrent Assets: $ 49 $ 380 $ 180 $ 180 $ 166 Restricted Assets: 502 3,411 2,400 2,716 2,713 Equity in Pooled Cash and Investments .............................. $ 11,905 $ 10,074 $ 9,975 $ 9,861 $ 9,460 Capital Assets 57 60 63 65 58 Land................................................................................... 759 759 759 759 5,612 Buildings............................................................................. 59,701 59,701 36,858 36,858 36,858 Improvements Other than Buildings .................................... 7,371 7,371 7,119 7,119 7,119 Machinery and Equipment .................................................. 9,766 10,135 7,273 7,296 7,392 Infrastructure...................................................................... 91,044 94,036 145,857 147,267 148,382 Accumulated Depreciation.................................................. (70,676) (74,588) (62,553) (67,051) (71,529) Construction in Progress .................................................... 7.706 40.221 372 3.937 52 Total Noncurrent Assets .................................................... $117,576 $147,709 $145,660 $146,046$143,346 1,223 Total Assets.......................................................................138 4.593 $172,091 $166,488 $165,077 $165,127 DEFERRED OUTFLOWS OF RESOURCES 36 179 32 851 29,460 26,843$ 2,714 Pension Related Deferred Outflows ...................................... . 0 0 0 202 195 LIABILITIES: Current Liabilities Accounts Payable................................................................. $ 49 $ 380 $ 180 $ 180 $ 166 Contracts Payable................................................................ 502 3,411 2,400 2,716 2,713 Accrued Liabilities................................................................ 38 44 53 54 62 Employee Vested Benefits .................................................... 57 60 63 65 58 Due to Other Governments................................................... 0 0 1 0 0 Interest Payable................................................................... 812 735 683 622 568 Bonded Debt Payable (Net) .................................................. 4.924 3.332 3.370 3.602 3.820 Total Current Liabilities........................................................ 6,382 7,962 6,750 7,239 7,387 Noncurrent Liabilities: Employee Vested Benefits .................................................... $ 40 $ 45 $ 44 $ 47 $ 41 Bonded Debt Payable (Net) .................................................. 36,004 32,660 29,290 25,606 21,281 Net Pension Liability ............................................................. 0 0 0 1,042 1,223 Other Post Employment Benefits Obligaflon ......................... 135 146 126 148 169 Total Noncurrent Liabilities ................................................. 36 179 32 851 29,460 26,843$ 2,714 Total Liabilities.................................................................. $ 42,561 $ 40,813 $ 36,210 $ 34,082 $ 30,101 DEFERRED INFLOW OF RESOURCES: Pension Related Deferred Inflows ......................................... 0 0 0 414 169 NET POSITION: Net Investment in Capital Assets .......................................... $ 64,743 $101,643 $103,025 $106,977 $108,785 Restricted by Bond Ordinance .............................................. 11,093 9,339 9,292 9,239 8,891 Unrestricted.......................................................................... 16.196 20.296 17.961 14.567 17.376 Total Net Position................................................................. 92,032$131,278$130,278 $130,783 $135,052 Note: (1) Source: Audited Financial Statements of the City The remainder of this page was left blank intentionally. 21 City ofhowa City, Johnson County, Iowa 55.235.000"Sewer Revenue Refunding Bonds, Series 2017B $5.910.000' {Yater Revenue Bonds, Series 2017C Sewer System Statements of Revenues, Expenses and Changes in Net Position(]) (Amounts Expressed in Thousands) Audited Fiscal Year Ended June 30 2012 2013 2014 2015 2016 OPERATING REVENUES: Charges for Services.............................................................. $12,670 $ 12,832 $ 12,559 $ 12,189 $ 12,266 Miscellaneous......................................................................... 145 102 75 126 94 $ Total Operating Revenues ..................................................... $12,815 $ 12,934 12,634 $ 12,315 $ 12,360 OPERATING EXPENSES: Sewer System Budget and Accruals (Modified Accrual Personal Services.................................................................. $ 1,993 $ 1,938 $ 2,001 $ 2,136 $ 2,808 Commodities.......................................................................... 954 854 1,006 1,473 1,421 Services and Charges............................................................ 4716 2,548 2.701 2.965 2.284 Total...................................................................................... $ 5,663 $ 5,340 $ 5,708 $ 6,574 $ 6,513 Depreciation........................................................................... 4952 3.912 4.036 4.497 4.484 Total Operating Expenses ..................................................... $ 9,615 $ 9,252 $ 9,744 $ 11,071 $ 10,997 OPERATING INCOME LOSS .................................................. $ 3,200 $ 3,682 $ 2,890 $ 1,244 $ 1,363 NONOPERATING REVENUES (EXPENSES): 812 625 129.92% 701 Services and Charges ................................................... 3,113 3,149 Gain (Loss) on Disposal of Capital Assets .............................. $ (12) $ 0 $ (10,062) $ 1 $ 0 Operating Grants.................................................................... 0 0 62 21 0 Interest Income....................................................................... 360 367 200 305 321 Interest Expense.................................................................... (1.56 (1.40 1284 1161 (9271 Total Nonoperating Revenues (Expenses) ............................ $ (1,216) $ (1,033) $ (11,084) $ (834) $ (606) Income (Loss) Before Capital Contributions and Transfers.. $ 1,984 $ 2,649 $ (8,194) $ 410 $ 757 Capital Contribulions............................................................... 3,223 30,841 7,422 1,370 3,839 Transfers In............................................................................. 2,454 7,322 26 239 195 Transfers Out.......................................................................... 359 (1,566) (254) 190 522 Change In Net Position.......................................................... $ 7,302 $ 39,246 $ (1,000) $ 1,829 $ 4,269 Net Position, Beginning ........................................................... 84730 92.032 131,278 128,954 130.783 Net Position, Ending................................................................ $92,032 $131,278 $130,278 $130,783 $135,052 Note: (1) Source: Audited Financial Statements of the City 77:e remainder- of this page was left blank intentionally. 22 Sewer System Budget and Accruals (Modified Accrual Basis) (Amounts Expressed in Thousands) Fiscal Year Ended June 30. 2016 Fiscal Year 2017 Actual Budget Percentage Budget Charges for Services ..................................................... $12,266 $12,559 97.67% $12,204 Interest Income.............................................................. 321 331 96.98% 291 Miscellaneous................................................................ 94 75 125.33% 94 Grants........................................................................... 1,163 366 317.76% 391 Bonds Sales.................................................................. 10,101 0 0.000/ �2 .2.c3 Total Receipts............................................................. $23.995 33. 179.62% $15.05 Personal Services......................................................... $ 2,194 $2,240 97.95% $2,265 Commodities................................................................. 812 625 129.92% 701 Services and Charges ................................................... 3,113 3,149 98.86% 3,049 Capital Ou0ay................................................................ 1,733 7,679 22.57% 1,060 Transfer to Capital Project Funds .................................. 500 500 100.00% 2,000 Debt Service Payments ................................................. 4_752 4695 101.21% 4660 Total Disbursements.................................................... $lfl 1 .-69.38% 77:e remainder- of this page was left blank intentionally. 22 City oflowa City, Johnson County, Iowa $5,235,000` Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C Water System Note: (1) Source: Audited Financial Statements of the City 23 Statement of Net Position(1) (Amounts Expressed in Thousands) Audited as of June 30 2012 2013 2014 2015 2016 ASSETS Current Assets: Equity in Pooled Cash and Investments ............................... $ 8,284 $ 7,410 $ 8,939 $ 8,670 $ 8,481 Receivables: Accounts and Unbilled Usage ............................................. 976 885 878 945 919 Interest............................................................................... 30 28 23 51 33 Due From Other Governments .............................................. 1,289 582 53 6 1 Inventories............................................................................. 414 411 389 357 451 Total Current Assets.......................................................... 10,993 9,316 $10,282 10 029 $ 9,885 Noncurrent Assets: Restricted Assets: Equity in Pooled Cash and Investments .............................. $ 4,260 $ 4,631 $ 4,801 $ 4,964 $ 5,026 Capital Assets Land................................................................................... 6,296 6,296 6,296 6,296 6,296 Buildings............................................................................. 24,019 24,019 24,019 24,019 24,019 Improvements Other than Buildings .................................... 2,351 2,351 2,418 2,418 2,511 Machinery and Equipment .................................................. 10,458 10,458 10,458 10,774 10,783 Infrastructure...................................................................... 52,511 54,685 56,718 58,417 60,602 Accumulated Depreciation.................................................. (25,618) (27,787) (29,968) (32,101) (34,396) Construction in Progress .................................................... 998 905 1.331 950 749 Total Noncurrent Assets .................................................... 75 27575 558558 $76,073 75 737 75 590 Total Assets.......................................................................$86,268$84,874 $86,355 $85,766 $85A75 DEFERRED OUTFLOWS OF RESOURCES Pension Related Deferred Outflows ...................................... 0 0 0 235 223 LIABILITIES: Current Liabilities: Accounts Payable................................................................. $ 133 $ 153 $ 278 $ 204 $ 16 Contracts Payable................................................................ 281 55 14 650 249 Accrued Liabilities................................................................ 44 50 56 61 70 Employee Vested Benefits .................................................... 77 77 83 69 72 Due to Other Governments................................................... 18 13 21 35 18 Interest Payable................................................................... 427 338 319 296 279 Bonded Debt Payable (Net) .................................................. 1,143 1.628 1.680 1,712 1y95 Total Current Liabilities........................................................ 2.12 2,314 2,451 3,027 2,499 Noncurrent Liabilities: Deposits............................................................................... $ 413 $ 434 $ 572 $ 753 $ 880 Employee Vested Benefits .................................................... 62 60 65 52 55 Bonded Debt Payable (Net) .................................................. 20,250 18,622 16,942 15,237 13,351 Net Pension Liability ............................................................. 0 0 0 1,172 1,385 Other Post Employment Benefits Obligation ......................... 146 170 180 191 187 Total Noncurrent Liabilities.................................................20 871 1$ 9.286 17 759 17,405 $15,858 Total Liabilities.................................................................. $ 22,994 $ 21,600 $ 20,210 $ 20,432 $18,357 DEFERRED INFLOW OF RESOURCES: Pension Related Deferred Inflows ......................................... 0 0 0 466 178 NET POSITION: Net Investment in Capital Assets .......................................... $ 49,679 $50,677 $52,650 $53,824 $55,418 Restricted by Bond Ordinance .............................................. 3,375 3,812 3,857 3,899 3,848 Unrestricted.......................................................................... 10,220 8,785 9.638 7380 ,897 Total Net Position................................................................. 63.27 63 274 $66,145 $65,103 $67,163 Note: (1) Source: Audited Financial Statements of the City 23 City oflowa Chy, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000' Water Revenue Bonds, Series 2017C Water System NONOPERATING REVENUES (EXPENSES) Gain (Loss) on Disposal of Capital Assets .............................. Statements of Revenues, Expenses and Changes in Net Position(]) $ 0 $ 11 (Amounts Expressed in Thousands) $ 8 Operating Grants.................................................................... 0 442 6 Audited Fiscal Year Ended June 30 0 Interest Income....................................................................... 2012 2013 2014 2015 2016 OPERATING REVENUES: 964 (731) 682 (608) 528 Charges for Services.............................................................. $8,419 $ 8,583 $ 8,443 $ 8,527 $ 9,134 Miscellaneous......................................................................... 26 174 16 13 17 Total Operating Revenues ..................................................... $8,445 8,757 $8459 8,540 9,151 OPERATING EXPENSES: 478 893 990 348 985 Personal Services.................................................................. $ 2,554 $ 2,633 $ 2,692 $ 2,495 $ 3,115 Commodities.......................................................................... 967 1,609 1,199 1,121 578 Services and Charges............................................................ y132 2.106 1.927 2.016 1 694 Total...................................................................................... $ 5,653 $ 6,348 $ 5,818 $ 5,632 $ 5.387 Depreciation........................................................................... 2 275 2.169 2.181 2.250 2,295 Total Operating Expenses ..................................................... 7.92 8,517 7,999 $ 7,882 7,682 OPERATING INCOME LOSS .................................................. $ 517 $ 240 $ 460 $ 658 $ 1,469 NONOPERATING REVENUES (EXPENSES) Gain (Loss) on Disposal of Capital Assets .............................. $ (10) $ 0 $ 11 $ (17) $ 8 Operating Grants.................................................................... 0 442 6 2 0 Interest Income....................................................................... 204 143 154 175 172 Interest Expense.................................................................... 964 (731) 682 (608) 528 Total Nonoperating Revenues (Expenses) ............................ $ (770) $ (146) $ (511) $ (448) $ (348) Income (Loss) Before Capital Contributions and Transfers.. $ (253) $ 94 $ (51) $ 210 $ 1,121 Capital Contributions............................................................... 1,057 494 2,049 581 674 Transfers In............................................................................. 478 893 990 348 985 Transfers Out.......................................................................... (110) (1,481) (117) 691 (720) Change In Net Position.......................................................... $ 1,172 $ 0 $ 2,871 $ 448 $ 2,060 Net Position, Beginning ........................................................... 62102 63.274 63.274 6y655 65103 Net Position, Ending................................................................ $63,274 $63,274 $66,145 $65,103 $67,163 Note: (1) Source: Audited Financial Statements of the City Water System Budget and Accruals (Modified Accrual Basis) (amounts expressed in thousands) The remainder of this page was left blank intentionally. 24 Fiscal Year 2017 Budget $ 8,926 171 15 0 :-9...1.12 $ 2,777 661 2,624 1,475 150 2,289 4 9 g76 Fiscal Year Ended June 30, 2016 Actual Budget Percentage Charges for Services ..................................................... $ 9,133 $ 9,265 98.58% Interest income.. ............................................................ 172 130 132.31% Miscellaneous................................................................ 26 17 152.94% Bonds Sales.................................................................. x_017 0 0.00% Total Receipts............................................................. $4 $x.412 141.82% Personal Services......................................................... $ 2,497 $ 2,752 90.73% Commodities................................................................. 570 701 81.31° Services and Charges ................................................... 2,389 2,606 91.67% Capital Outlay................................................................ 468 2,081 22.49% Transfer to Capital Project Funds .................................. 706 846 83.45% Debt Service Payments.................................................y335 2294 101.79% Total Disbursements.................................................... $_ 8.965 $11.280 7948% The remainder of this page was left blank intentionally. 24 Fiscal Year 2017 Budget $ 8,926 171 15 0 :-9...1.12 $ 2,777 661 2,624 1,475 150 2,289 4 9 g76 City of Iowa City, Johnson County, Iowa $5,135,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000' Water Revenue Bands, Series 2017C EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS Pensions The City contributes to the Iowa Public Employees' Retirement System ("IPERS"), which is a cost-sharing multiple - employer 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. Employees who retire at age 65 (or anytime after age 55 with 30 or more years of service) are entitled to full monthly benefits. IPERS offers five options for distribution of retirement benefits. Benefits become fully vested after completing seven years of service or after attaining age 65. 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 City's share is payable from the applicable funds of the City. All contributions are on a current basis. See APPENDIX B — Note 6 for additional information on IPERS. The following table sets forth the contributions made by the City and employees to IPERS for the period indicated. The City has always made their full statutorily required contributions to IPERS. The City cannot predict the levels of funding that will be required in the future. The IPERS fund is administered by the IPERS Board with administration costs paid from income derived from invested funds. IPERS has an unfunded actuarial liability and unrecognized actuarial loss. The following table sets forth certain information about the funding status of IPERS that has been extracted from the Actuarial Valuation Report of ]PERS for fiscal years noted below (the "IPERS Reports"). A complete copy of the Reports can be obtained by visiting IPERS website at: http://ww.iT)ers.org/ or by writing to IPERS at P.O. Box 9117, Des Moines, Iowa 50306-9117. % of Payroll % of Payroll Fiscal Yea Paid by the City Paid by Employee 2014 ........................... 8.93% 5.95% 2015 ........................... 8.93% 5.95% 2016 ........................... 8.93% 5.95% 2017 ........................... 8.93% 5.95% 2018 ........................... 8.93% 5.95% The IPERS fund is administered by the IPERS Board with administration costs paid from income derived from invested funds. IPERS has an unfunded actuarial liability and unrecognized actuarial loss. The following table sets forth certain information about the funding status of IPERS that has been extracted from the Actuarial Valuation Report of ]PERS for fiscal years noted below (the "IPERS Reports"). A complete copy of the Reports can be obtained by visiting IPERS website at: http://ww.iT)ers.org/ or by writing to IPERS at P.O. Box 9117, Des Moines, Iowa 50306-9117. Source: IPERS Reports According to IPERS, the market value investment return on program assets is as follows: Fiscal Year Ended Unfunded Actuarial Funded Ratio 3.73% UAAL as a Fiscal 2014_ .......................................................... 15.88% Accrued Liability (Actuarial 2016............................................................ Percentage of Covered Year Ending Actuarial Value Actuarial Accrued (Actuarial Value) Value) Covered Payroll (Actuarial June 30 of Assets ral Liability rbl lbl-Fal FaNbl Payroll Fcl Value)1rb-al4cll 2012........... $23,530,094,461 $29,446,197,486 $5,916,103,025 79.91% $6,786,158,720 87.18% 2013........... 24,711,096,187 30,498,342,320 5,787,246,133 81.02% 6,880,131,134 84.12% 2014........... 26,460,428,085 32,004,456,088 5,544,028,003 82.68%' 7,099,277,280 78.09% 2015........... 27,915,379,103 33,370,318,731 5,454,939,628 83.65% 7,326,348,141 74.46% 2016........... 29,033,696,587 34,619,749,147 5,586,052,560 83.86% 7,556,515,720 73.92% Source: IPERS Reports According to IPERS, the market value investment return on program assets is as follows: Fiscal Year Ended Investment nJune° 2012............................................................ 3.73% 2013............................................................ 10.12% 2014_ .......................................................... 15.88% 2015............................................................ 3.06% 2016............................................................ 2.15% Source: IPERS Reports 25 City oflmva City, Johnson County, Imva $5.235,000' Sewer Revenue Refunding Bonds, Series 2017B $5.910,000• Water Revenue Bonds. Series 2017C Bond Counsel, Disclosure 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 MFPRSI and IPERS discussed above or included on the their websites, including, but not limited to, updates of such information on the State Auditor's website or links to other Internet sites accessed through the websites. Pursuant to GASB Statement No. 68, the City reported a liability of $20,548,735 as of June 30, 2016 for its proportionate share of the net pension liability for ("IPERS"). The net pension liability is the amount by which the total actuarial liability exceeds the pension plan's net assets or fiduciary net position (essentially the market value) available for paying benefits. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's share of contributions to the pension plan relative to the contributions of all IPERS participating employers. As of June 30, 2015, the City's collective proportion was 0.4159256%. For additional information, see the City's Audited Financial Statements for Fiscal Year Ending June 30, 2016 in APPENDIX B. Other Post -Employment Benerits (OPEB) In June 2004, the Governmental Accounting Standards Board ("GASB") issued GASB 45, which address how state and local governments are required to account for and report their costs and obligations related to other post -employment benefits ("OPEB"), defined to include post-retirement healthcare benefits. GASB 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pension establishes financial reporting standards designed to measure, recognize and display OPEB costs. OPEB costs would become measurable on an accrual basis of accounting, and contribution rates (actuarially determined) would be prescribed for funding such costs. The provisions of GASB 45 do not require governments to fund their OPEBs. The City may establish its OPEB liability at zero as of the beginning of the initial year of implementation; however the unfunded actuarial liability is required to be amortized over future periods. As of July 1, 2014, the most recent valuation date for the period July I, 2015 through June 30, 2016, the actuarial accrued liability was $5,150,697, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $5,150,697. The covered payroll (annual payroll of active employees covered by the plan) was $35,972,442 and the ratio of the UAAL to covered payroll was 14.3%. As of June 30, 2016, there were no trust fund assets. As of the July 1, 2014 actuarial valuation date, the actuarial cost method used the entry -age normal method. See APPENDIX B — Notes (6) and (7) herein for further discussion of the City's employee retirement benefit obligations. REGISTRATION, TRANSFER AND EXCHANGE See also APPENDIX C - BOOK -ENTRY SYSTEM for information on registration, transfer and exchange of book - entry bonds. The Bonds will be initially issued as book -entry bonds. The City shall cause books (the "Bond Register") for the registration and for the transfer of the Bonds to be kept at the principal office maintained for the purpose by the Bond Registrar in St. Paul, Minnesota. The City will authorize to be prepared, and the Bond Registrar shall keep custody of, multiple bond blanks executed by the City for use in the transfer and exchange of Bonds. Any Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in the Bond Resolution. Upon surrender for transfer or exchange of any Bond at the principal office maintained for the purpose by the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by the registered owner or such owner's attorney duly authorized in writing, the City shall execute and the Bond Registrar shall authenticate, date and deliver in the name of the registered owner, transferee or transferees (as the case may be) a new fully registered Bond or Bonds of the same maturity and series and interest rate of authorized denominations, for a like aggregate principal amount. 26 City oflowa City, Johnson County, Iowa $5,135,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000' Water Revenue Bonds, Series 2017C The execution by the City of any fully registered Bond shall constitute full and due authorization of such Bond, and the Bond Registrar shall thereby be authorized to authenticate, date and deliver such Bond, provided, however, the principal amount of outstanding Bonds of each series and maturity authenticated by the Bond Registrar shall not exceed the authorized principal amount of Bonds for such series and maturity less Bonds previously paid. The Bond Registrar shall not be required to transfer or exchange any Bond following the close of business on the fifteenth day of the month next preceding an interest payment date on such bond (known as the record date), nor to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, nor during a period of fifteen days next preceding mailing of a notice of redemption of any Bonds. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bonds shall be made only to or upon the order of the registered owner thereof or such owner's legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. No service charge shall be made for any transfer or exchange of Bonds, but the City or the Bond Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds except in the case of the issuance of a Water Bond or Bonds for the unredeemed portion of a bond surrendered for redemption. TAX MATTERS Tax Exemption Federal tax law contains a number of requirements and restrictions that apply to the Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of Bond proceeds and facilities financed with Bond proceeds, and certain other matters. The City has covenanted to comply with all requirements that must be satisfied in order for the interest on the Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. Subject to the City's compliance with the above -referenced covenants, under present law, in the opinion of Bond Counsel, interest on the Bonds is excludable from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations. Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to 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 or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective purchasers of the Bonds should consult their tax advisors as to collateral federal income tax consequences. The interest on the Bonds is not exempt from present Iowa income taxes. 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. NOT Qualified Tax -Exempt Obligations The City will NOT designate the Bonds as "qualified tax-exempt obligations". 27 City oflowa City, Johnson County. Iowa $5,235,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C Tax Accounting Treatment of Discount and Premium on Certain Bonds The initial public offering price of certain Bonds may be less than the amount payable on such Bonds at maturity ("Discount Bonds"). Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. The initial public offering price of certain Bonds may be greater than the amount of such Bonds at maturity ("Premium Bonds"). Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. Other Tax Advice In addition to the income tax consequences described above, potential investors should consider the additional tax consequences of the acquisition, ownership, and disposition of the Bonds. For instance, state income tax law may differ substantially from state to state, and the foregoing is not intended to describe any aspect of the income tax laws of any state. Therefore, potential investors should consult their own tax advisors with respect to federal tax issues herein covered by the opinion and with respect to the various state tax consequences of an investment in Bonds. Audits The Internal Revenue Service (the "Service") has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Bonds. If an audit is commenced, under current procedures the Service may treat the City as a taxpayer and the Bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome. Reporting and Withholding Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, including the Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any Bond owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. Tax Legislation Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may be considered by the Iowa legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Bonds will not have an adverse effect on the tax status of interest or other income on the Bonds or the market value or marketability of the Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the Bonds from gross income for federal or state income tax purposes for all or certain taxpayers. 28 City oflowa City, Johnson County, Iowa $5,235,000• Sewer Revenue Refunding Bonds, Serres 2017B $5,910,000* Water Revenue Bonds, Series 2017C Some legislative proposals may carry retroactive effective dates, that, if enacted, could alter or amend the tax matters referred to in this section or affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal or state tax legislation. 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. Enforcement Holders of the Bonds 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 authorizing issuance of the Bonds (the "Bond Resolution"). The practical realization of any rights upon any default will depend upon the exercise of various remedies specified in the Bond Resolution. The remedies available to the owners of the Bonds upon an event of default under the Bond Resolution, 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 Bond 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 opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by general principles of equity and public policy and by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. No representation is made, and no assurance is given, that the enforcement of any remedies with respect to such assets will result in sufficient funds to pay all amounts due under the Bond Resolution, including principal of and interest on the Bonds. Opinion Bond Counsel's opinion is not a guarantee of a result, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the City described in this section. No ruling has been sought from the Service with respect to the matters addressed in the opinion of Bond Counsel and Bond Counsel's opinion is not binding on the Service. Bond Counsel assumes no obligation to update its opinion after the issue date to reflect any further action, fact or circumstance, or change in law or interpretation, or otherwise. See APPENDIX D for a draft forms of legal opinions for the Bonds. ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS (INCLUDING BUT NOT LIMITED TO THOSE LISTED ABOVE). 29 City oflowa Cory, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C CONTINUING DISCLOSURE For the purpose of complying with Rule 15c2-12 of the Securities Exchange Commission, as amended and interpreted from time to time (the "Rule"), the City will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds to provide reports of specified information and notice of the occurrence of certain events, as hereinafter described (the "Disclosure Covenants"). The information to be provided on an annual basis, and the events as to which notice is to be given, is set forth in "APPENDIX D — Form of Continuing Disclosure Certificate". This covenant is being made by the City to assist the Underwriter(s) in complying with the Rule. Breach of the Disclosure Covenants will not constitute a default or an "Event of Default" under the Bonds or Resolution, respectively. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the City to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. In the past five years, the City believes it has materially complied with its disclosure undertakings, except, for the fiscal years ending June 30 of 2012, 2013,2014 and 2015, certain financial information and operating data ("Debt Ratio (overlapping)", "City Funds on Hand" and "General Fund Budget"), while contained in the timely filed CAFRs, were not presented in the same format and indexed in the "Annual Financial Information and Operating Data" portion of the EMMA system. The City has taken steps to ensure future filing of this information in compliance with the applicable undertakings." Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5) of the Rule. OPTIONAL The Sewer Bonds are not subject to optional redemption prior to maturity. The Water Bonds due July 1, 2018 - 2022, inclusive, are not subject to optional redemption. The Water Bonds due July 1, 2023 - 2025, inclusive, are callable in whole or in part on any date on or after July 1, 2022, at a price of par and accrued interest. If less than all the Water Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the City and within any maturity by lot. Thirty days' written notice of redemption shall be given to the registered owner of the Water Bond. Failure to give written notice to any registered owner of the Water Bonds or any defect therein shall not affect the validity of any proceedings for the redemption of the Water Bonds. All Water Bonds or portions thereof called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment. Written notice will be deemed completed upon transmission to the owner of record. If selection by lot within a maturity is required, the Registrar shall designate the Water Bonds to be redeemed by random selection of the names of the registered owners of the entire annual maturity until the total amount of Water Bonds to be called has been reached. If less than all of a maturity is called for redemption, the Issuer will notify DTC of the particular amount of such maturity to be redeemed prior to maturity. DTC will determine by lot the amount of each Participant's interest in such maturity to be redeemed and each Participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. All prepayments shall be at a price of par plus accrued interest. LITIGATION There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any proceedings of the City taken with respect to the issuance or sale thereof. There is no litigation now pending, or to the knowledge of the City, threatened against the City that is expected to materially impact the financial condition of the City. Til City of/owa City, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bonds, Series 20I7B $5,9/0,000' Water Revenue Bonds, Series 20I7C LEGAL MATTERS The Bonds are subject to approval as to certain legal matters by Ahlers & Cooney, P.C., Des Moines, Iowa, as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement except for guidance concerning the sections regarding "TAX MATTERS", and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify any of the financial or statistical statements, or data contained in this Official Statement, and will express no opinion with respect thereto. The forms of legal opinion are set out in APPENDIX D to this Official Statement. The legal opinion to be delivered concurrently with the delivery of the Bonds expresses the professional judgment of the attorneys rendering the opinion as to legal issues expressly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgment, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in the Bond Counsel's opinion. The opinion will state, in part, that the obligation of the City with respect to the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, and to the exercise of judicial discretion in appropriate cases. OFFICIAL STATEMENT AUTHORIZATION This Official Statement has been authorized for distribution to prospective purchasers of the Bonds. All statements, information, and statistics herein are believed to be correct but are not guaranteed by the consultants or by the City, and all expressions of opinion, whether or not so stated, are intended only as such. The auditors have not performed any additional review and have not consented to the inclusion of the excerpts from the financial statements and the 2016 Audit shown in APPENDIX B. This Official Statement is not to be construed as a contract or agreement amongst the City, the Underwriter, or the holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and expressions of opinions contained herein are subject to change without notice and neither the delivery of this Official Statement or the sale of the Bonds made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. The information contained in this Official Statement is not guaranteed. INVESTMENT RATING The City has supplied certain information and material concerning the Bonds and the City to the rating service shown on the cover page, including certain information and materials which may not have been included in this Official Statement, as part of its application for an investment raring on the Bonds. A rating reflects only the views of the rating agency assigning such rating and an explanation of the significance of such rating may be obtained from such rating agency. Generally, such raring service bases its rating on such information and material, and also on such investigations, studies and assumptions that it may undertake independently. There is no assurance that such rating will continue for any given period of time or that it may not be lowered or withdrawn entirely by such rating service if, in its judgment, circumstances so warrant. Any such downward change in or withdrawal of such raring may have an adverse effect on the secondary market price of the Bonds. An explanation of the significance of the investment rating may be obtained from the rating agency: Moody's Investors Service, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007, telephone 212-553-1658. 31 City oflowa City, Johnson County, Iowa $5,135,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Wafer Revenue Bonds. Series 2017C UNDERWRITING The Sewer Bonds were offered for sale by the City at a public, competitive sale on May 2, 2017. The best bid submitted at the sale was submitted by (the "Sewer Bonds Underwriter"). The City awarded the contract for sale of the Sewer Bonds to the Sewer Bond Underwriter at a price of $ (reflecting the par amount of $ plus a reoffering premium of $ , and less an Underwriter's discount of $_�. The Sewer Bonds Underwriter has represented to the City that the Sewer Bonds have been subsequently re -offered to the public initially at the yields or prices set forth in the on the cover of the Final Official Statement. The Water Bonds were offered for sale by the City at a public, competitive sale on May 2, 2017. The best bid submitted at the sale was submitted by (the "Water Bonds Underwriter"). The City awarded the contract for sale of the Water Bonds to the Water Bond Underwriter at a price of $ (reflecting the par amount of $ , plus a reoffering premium of $ , and less an Underwriter's discount of The Water Bonds Underwriter has represented to the City that the Water Bonds have been subsequently re -offered to the public initially at the yields or prices set forth in the on the cover of the Final Official Statement. MUNICIPAL ADVISOR The City has engaged Speer Financial, Inc. as municipal advisor (the "Municipal Advisor") in connection with the issuance and sale of the Bonds. The Municipal Advisor is a Registered Municipal Advisor in accordance with the rules of the MSRB. The Municipal Advisor will not participate in the underwriting of the Bonds. The financial information included in the Official Statement has been compiled by the Municipal Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not conform with accounting principles applicable to compilations of financial information. The Municipal Advisor is not a firm of certified public accountants and does not serve in that capacity or provide accounting services in connection with the Bonds. The Municipal Advisor is not obligated to undertake any independent verification of or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement, nor is the Municipal Advisor obligated by the City's continuing disclosure undertaking. CERTIFICATION I have examined this Official Statement dated April 20, 2017, for the $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B and $5,910,000* Water Revenue Bonds, Series 2017C, believe it to be true and correct and will provide to the purchasers of the Bonds at the time of delivery certificates confirming to the purchasers that to the best of our knowledge and belief, information in the Official Statement was at the time of acceptance of the bid for the Bonds and, including any addenda thereto, was at the time of delivery of the Bonds true and correct in all material respects and does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. -Subject to change. 32 /s/ DENNIS BOCKENSTEDT Finance Director CITY OF IOWA CITY Johnson County, Iowa City oflowa City, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue. Bonds, Series 2017C APPENDIX A CITY OF IOWA CITY, IOWA The Bonds are notpayable in any manner by taxation but, together with presently outstanding sewer and water revenue notes of the City ranking on a parity, and any additional debt as maybe hereafter issued and outstanding from time to time under prescribed conditions and restrictions ranking on a paritytherewith, will be payable only from the net revenues of the Sewer and Water Systems securing such series of Bonds as described in the Official Statement. The Bonds are not general obligations ofthe City. The City is in no wanner liable by reason of the failure of the net revenues of the Sewer and Water Systems to be sufficient for the payment of the respective series of the Bonds secured by each such System. General Information The City of Iowa City (the "City") is located in East Central Iowa and was incorporated in 1853 under the laws of the state of Iowa (the "State") and operates under the Council/Manager form of government. The 2010 Census reported population at 67,862, which is 9% increase over the 2000 Census population of 62,220. The City is the largest City in Johnson County (the "County") and serves as the County seat. City Organization and Services The City is governed by a seven member Council and each member serves a four-year term. Elections are held every two years, allowing for continuation in office of at least three members in each biennial election. The Council members are elected at large, but three members are nominated from specific districts and the other four are nominated at large. The Mayor is elected by the Council from its own members. Currently the City employs approximately 540 full-time, 60 permanent part-time and 377 temporary employees, including a police force of 82 sworn personnel and a fire department of 64 fire fighters. The City considers its employee relations to be good. The City currently maintains labor agreements with the American Federation of State, County, and Municipal Employees ("AFSCME") which contract expires June 30, 2021; with Police ("PLRO") which contract expires June 30, 2019; and Fire fighters ("IAFF") which contract expires June 30, 2019. The City provides a broad range of services to its citizens including general government, public safety, streets, parks, and cultural facilities. It also operates an airport, a mass transportation system, parking facilities, water treatment, wastewater treatment, storm water collection, sanitation collection and disposal (including landfill operations), cable television, and a housing authority. Community Life The City is the only North American City to be awarded the City of Literature in North America by UNESCO in 2008, which has a goal of fostering cultural diversity. The City hosts a variety of cultural events, such as the Iowa Writers' Workshop, whose graduates include John Irving, Flannery O'Connor, T.C. Boyle; the International Writing Program; the Non -Fiction Writing Program; the Iowa Playwrights' Workshop; and the Iowa Summer Writing Festival. A variety of events sponsored by the City include the Summer of the Arts program, a festival of the arts, a nationally renowned jazz festival, open-air summer movies and free concerts in the pedestrian mall. The City Book Festival, the Iowa Biennial Exhibition, and The Landlocked Film Festival are events hosted by the City. The newly reopened Hancher Auditorium hosts nationally touring theater, dance and musical shows, and has commissioned more than 100 works of music, theater and dance during the last 20 years. A -I City oflowa City, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C Education Public education to the City is provided by the Iowa City Community School District (the "District"), with certified enrollment of 13,982 for Fiscal Year 2016-17. There are approximately 2,346 full and part-time employees of the District. The District owns and operates several pre-school sites, twenty elementary schools, three middle schools, two senior high schools, and one alternative school for ninth through twelfth graders. Education is also provided through the Clear Creek — Amana Community School District, with certified enrollment of 2,005 for Fiscal Year 2016-17. Four year college programs and vocational training are available throughout the area including the University of Iowa and Kirkwood Community College. Transportation The City is approximately 115 miles east of the City of Des Moines, 20 miles southeast of the City of Cedar Rapids and 55 miles northwest of the City of Davenport. The Eastern Iowa Airport is located 20 miles from downtown Iowa City and is served by a number of national and regional air carriers. A general aviation airport, Iowa City Municipal Airport is located on the south side of the City. The Iowa Interstate Railway, and Cedar Rapids and Iowa City Railway provide the City's rail service. Bus transportation is provided by Iowa City Transit, Coralville Transit, and the University of Iowa. There is also a system of paved bicycle paths in the City along the Iowa River and some main roads in the City have paved bicycle shoulders. SOCIOECONOMIC INFORMATION The following demographic information is for the City. Additional comparisons are made with the County and the State. Population The following table reflects population trends for the City, the County and the State. Population Comparison(1) Note: (1) Source: U.S. Bureau of the Census The remainder of this page was left blank intentionally. A-2 The Percent The Percent The Percent Year city Chance County Change State Change 1970 ..................... 46,850 n/a 72,127 We 2,824,376 We 1980 ..................... 50,508 7.81% 81,717 13.30% 2,913,808 3.17% 1990 ..................... 59,735 18.27% 96,119 17.62% 2,776,755 (4.70%) 2000 ..................... 62,220 4.16% 111,006 15.49% 2,926,324 5.39% 2010 ..................... 67,862 9.07% 130,882 17.91% 3,046,355 4.10% Note: (1) Source: U.S. Bureau of the Census The remainder of this page was left blank intentionally. A-2 City oflowa City, Johnson County, Iowa $5,135,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910.000' Water Revenue Bonds; Series 2017C Employment Following are lists of large employers located in the City. Major City Employers(]) The following tables show employment by industry and by occupation for the City, the County and the State as reported by the U.S. Census Bureau 2011 - 2015 American Community Survey 5 -year estimated values. Employment By Industry(]) Classification Agriculture, forestry, fishing and hunting, and mining ........................... Construction........................................................................................ Wholesaletrade.................................................................................. Retailtrade.......................................................................................... Transportation and warehousing, and utilities ...................................... Information.......................................................................................... Finance and insurance, and real estate and rental and leasing............ Professional, scientific, and management, and administrative and waste management services....................................................... Educational services, and health care and social assistance ............... Arts, entertainment, and recreation, and accommodation andfood services............................................................................... Other services, except public administration ........................................ Public administration........................................................................... Total................................................................................................. The City Number Percent 159 0.40% 1,287 3.20% 2,783 6.90% 495 1.20% 3,576 8.90% 988 2.50% 731 1.80% 1,585 3.90% 3,226 8.00% 18,100 45.00% 5,383 13.40% 1,318 3.30% 616 1.50% 40,247 100.00% The Count Number Percent -130% Approximate Name Product/Service Employment(2) Universityof Iowa...................................................................... Education......................................................................................... 18,650 University of Iowa Hospitals....................................................... Healthcare........................................................................................ 8,705 Iowa City Community School District ......................................... Education......................................................................................... 2,345 Iowa City Veterans Health Care System .................................... Health Services................................................................................ 1,560 Mercy Hospital........................................................................... Health Services................................................................................ 1,560 Pearson Educational Measurement ...........................................Educational Testing Services............................................................ 1,145 Hy-Vee(3).................................................................................. Grocery............................................................................................. 1,165 ACT, Inc.................................................................................... Education Programs......................................................................... 1,090 Cityof Iowa City........................................................................Government...................................................................................... Production, transportation, and material moving occupations .............. 975 SystemsUnlimited.....................................................................Assisted Living .................................................................................. 890 International Automotive Components.......................................Auto Interior Components................................................................. 785 Procter & Gamble...................................................................... Health and Beauty Products............................................................. 590 Oral B Laboratories...................................................................Toothbrush Manufacturer.................................................................. 460 Johnson County Administration.................................................Government...................................................................................... 435 Alpla of Iowa.............................................................................. Plastic Bottle Manufacturer............................................................... 360 United Natural Foods.................................................................Organic Food Distribution................................................................. 340 Notes: (1) Source: The Iowa City Area Development Group website. (2) Number of employees includes all full-time, part-time and seasonal employees. (3) Number of employees includes locations in Iowa City and Coralville. The following tables show employment by industry and by occupation for the City, the County and the State as reported by the U.S. Census Bureau 2011 - 2015 American Community Survey 5 -year estimated values. Employment By Industry(]) Classification Agriculture, forestry, fishing and hunting, and mining ........................... Construction........................................................................................ Wholesaletrade.................................................................................. Retailtrade.......................................................................................... Transportation and warehousing, and utilities ...................................... Information.......................................................................................... Finance and insurance, and real estate and rental and leasing............ Professional, scientific, and management, and administrative and waste management services....................................................... Educational services, and health care and social assistance ............... Arts, entertainment, and recreation, and accommodation andfood services............................................................................... Other services, except public administration ........................................ Public administration........................................................................... Total................................................................................................. The City Number Percent 159 0.40% 1,287 3.20% 2,783 6.90% 495 1.20% 3,576 8.90% 988 2.50% 731 1.80% 1,585 3.90% 3,226 8.00% 18,100 45.00% 5,383 13.40% 1,318 3.30% 616 1.50% 40,247 100.00% The Count Number Percent -130% 1,053 3.90% 3,230 4.10% 6,455 8.20% 1,343 1.70% 7,310 9.30% 2,494 3.20% 1,405 1.80% 4,252 5.40% 6,348 8.10% 32,037 40.60% 8,375 10.60% 2,754 3.50% 1y82 2.30% 78,838 100.00% Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5 -Year Estimates from 2011 - 2015. Employment By Occupation(]) Percent 61,617 3.90% The City The County Classification Number Percent Number Percent Management, business, science, and arts occupations ....................... 18,511 46.00% 35,838 45.50% Service occupations............................................................................ 8,335 20.70% 14,205 18.00% Sales and office occupations............................................................... 7,775 19.30% 16,467 20.90% Natural resources, construction, and maintenance occupations........... 1,544 3.80% 4,138 5.20% Production, transportation, and material moving occupations .............. 4 082 10.10% 8 190 10,40% Total.................................................................................................. 40,247 100.00% 78.838 100.00% Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5 -Year Estimates from 2011 - 2015 A-3 The State Number Percent 61,617 3.90% 97,457 6.20% 239,613 15.20% 44,824 2.80% 184,108 11.70% 72,148 4.60% 27,694 1.80% 117,133 7.40% 112,752 7.20% 382,209 24.30% 117,422 7.50% 66,559 4.20% 49.974 3.20% 1,573,510 100.00% The State Number Percent 542,576 34.50% 261,689 16.60% 367,136 23.30% 147,292 9.40% 254.817 16.20% 1,573,510 100.00% City oflowa City, Johnson County, Iowa $5,235,000" Sewer Revenue Refunding Bonds, Series 2017B $$910,000` Water Revenue Bonds, Series 2017C States. The following shows the annual average unemployment rates for the City, the County, the State and the United Annual Average Unemployment Rates(/)(2) Calendar The The The United Year City County State States 2012 ........................ 3.5% 3.7% 5.1% 8.1% 2013 ........................ 3.3% 3.4% 4.7% 7.4% 2014 ........................ 3.0% 3.0% 4.2% 6.2% 2015 ........................ 2.5% 2.6% 3.7% 5.3% 2016 ........................ 2.8% 2.6% 3.5% 4.7% Notes: (1) Source: Iowa Workforce Development and U.S. Bureau of Labor Statistics. (2) Not seasonally adjusted. Building Permits City Building Permits(]) (Excludes the Value of Land) Calendar Year: 2012 2013 2014 2015 2016 2017(2) New Construction No. of New Permits .............................. 225 248 250 184 262 25 Valuation: ............................................ $ 95,292,497 $151,138,166 $124,416,182 $106,350,572 $295,339,497 $12,473,596 Remodeling Repair and Additions No. of New Permits: ............................. 491 467 453 461 532 87 Valuation: ............................................ $ 73,944,194 $ 33,738,686 $ 28,163,030 $ 31,960,941 $ 93,087,526 $ 7,665,796 Total Permits ....................................... 716 715 703 645 794 112 Total Valuations ................................... $169,236,691 $184,876,852 $152,579,212 $138,311,513 $388,427,023 $ 20,139,392 Notes: (1) Source: the City. (2) As of February, 2017. Housing The U.S. Census Bureau 5 -year estimated values reported that the median value of the City's owner -occupied homes was $186,100. This compares to $193,600 for the County and $129,200 for the State. The following table represents the five year average market value of specified owner -occupied units for the City, the County and the State at the time of the 2011 - 2015 American Community Survey. Value Less than $50,000 ............................. $50,000 to $99,999 ............................ $100,000 to $149,999 ........................ $150,000 to $199,999 ........................ $200,000 to $299,999 ........................ $300,000 to $499,999 ........................ $500,000 to $999,999 ........................ $1,000,000 or more ........................... TOTAL............................................. Home Values(]) The City Number Number Percent 1,043 7.50% 722 5.20% 2,481 17.90% 3,638 26.30% 3,704 26.80% 1,763 12.70% 431 3.10% 46 0.30% 13,828 100.00% The County Number Percent 3,350 10.20° 2,008 6.10% 4,887 14.80% 7,107 21.60% 8,552 25.90% 5,288 16.00% 1,406 4.30% 375 1.10% 32,973 100.00% The Slate Number Percent 99,287 11.20% 216,328 24.50% 201,698 22.80% 151,787 17.20% 135,180 15.30% 59,446 6.70% 15,485 1.80% 4,_597 0.50% 883,808 100.00% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 - 2015. A-4 City oflowa City, Johnson County, Iowa $5,135,000* Sewer Revenue Refu ding Bonds, Series 2017B $5,910,000' Water Revenue Bands, Series 2017C Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 - 2015 Income The U.S. Census Bureau 5 -year estimated values reported that the City had a median family income of $75,104. This compares to $83,245 for the County and $67,466 for the State. The following table represents the distribution of family incomes for the City, the County and the State at the time of the 2011 - 2015 American Community Survey. Income Less than $10,000 ............... $10,000 to $14,999 .............. $15,000 to $24,999 .............. $25,000 to $34,999 .............. $35,000 to $49,999 .............. $50,000 to $74,999 .............. $75,000 to $99,999 .............. $100,000 to $149,999.......... $150,000 to $199,999.......... $200,000 or more ................ Total................................. Family Income(1) The City Percent Mortgage Status(/) Percent 704 5.40°/ 465 The City The County The State Mortgage Status Number Percent Number Percent Number Percent Housing units with a mortgage........... 9,346 67.60% 22,845 69.30°/ 541,161 61.20% Housing units without a mortgage...... 4.482 32.40% 10 128 30.70% 342,647 38.80% Total ................................................ 13,828 100.00% 32,973 100.00% 883,808 100.00% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 - 2015 Income The U.S. Census Bureau 5 -year estimated values reported that the City had a median family income of $75,104. This compares to $83,245 for the County and $67,466 for the State. The following table represents the distribution of family incomes for the City, the County and the State at the time of the 2011 - 2015 American Community Survey. Income Less than $10,000 ............... $10,000 to $14,999 .............. $15,000 to $24,999 .............. $25,000 to $34,999 .............. $35,000 to $49,999 .............. $50,000 to $74,999 .............. $75,000 to $99,999 .............. $100,000 to $149,999.......... $150,000 to $199,999.......... $200,000 or more ................ Total................................. Family Income(1) The City Percent Number Percent 704 5.40°/ 465 3.60% 751 5.80% 704 5.40% 1,755 13.50% 2,086 16.10% 1,913 14.80% 2,450 18.90% 984 7.60% 1147 8.90% 12,959 100.00% The Coun Number Percent 1,019 3.30°/ 647 2.10% 1,348 4.40% 1,576 5.20% 3,422 11.20% 5,113 16.70% 5,610 18.40% 6,531 21.40% 2,642 8.60% 2.663 8.70% 30,571 100.00% The State Number Percent 26,913 3.40% 18,627 2.30% 51,011 6.40% 66,927 8.40% 107,269 13.50% 177,374 22.20% 137,743 17.30% 135,257 17.00% 41,758 5.20% 34.602 4.30% 797,481 100.00% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 to 2015. The U.S. Census Bureau 5 -year estimated values reported that the City had a median household income of $42,375. This compares to $55,700 for the County and $53,183 for the State. The following table represents the distribution of household incomes for the City, the County and the State at the time of the 2011 - 2015 American Community Survey. Income Less than $10,000 ................... $10,000 to $14,999 .................. $15,000 to $24,999 .................. $25,000 to $34,999 .................. $35,000 to $49,999 .................. $50,000 t0 $74,999 .................. $75,000 to $99,999 .................. $100,000 to $149,999 .............. $150,000 to $199,999 .............. $200,000 or more .................... Total..................................... Household Income(1) The City Number Percent 4,047 24.20% 2,202 13.20% 3,348 20.00% 2,657 15.90% 3,964 23.70% 3,991 23.80% 3,140 18.80% 3,133 18.70% 1,126 6.70% 1.37 8.20% 28,985 173.10% The County Number Percent 5,363 32.00% 2,792 16.70% 5,186 31.00% 4,877 29.10% 6,995 41.80% 8,713 52.00% 7,683 45.90% 7,766 46.40% 2,890 17.30% 3161 18.900/0 55,426 331.10% The State Number Percent 76,474 6.20% 63,657 5.10% 129,499 10.50% 131,466 10.60% 178,302 14.40% 247,858 20.00% 168,910 13.70% 154,870 12.50% 46,153 3.70% 39.220 3.20% 1,236,409 100.00% Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5 -year estimates 2011 - 2015. A-5 City of Iowa City, Johnson County, Iowa $5,135,000' Sewer Revenue Refunding Bonds, Series 2017B S5,910,000- Water Revenue Bonds, Series 2017C Retail Sales The Department of Revenue of the State of Iowa provides retail sales figures based on sales tax reports for years ending June 30. The Department of Revenue figures provide recent data to confirm trends in retail sales activity in the City. The City does not receive any local option sales tax. PROPERTY ASSESSMENT AND TAX INFORMATION Property and Trend of Valuations Actual (100%) Valuations for the City(1)(2) Fiscal Year: Retail Taxable Sales(]) 2013/14 Fiscal Year Taxable Annual Percent Ending June 30 Sales Change +(-1 2007(2) ......................... $934,971,428 3.72%(3) 2008(2) ......................... 958,509,729 2.52% 2009 ............................. 905,139,461 (5.57%) 2010 ............................. 725,329,723 (19.87%) 2011 ............................. 741,407,021 2.22% 2012 ............................. 767,122,555 3.47% 2013 ............................. 793,201,342 3.40% 2014 ............................. 811,039,164 2.25% 2015 ............................. 838,853,686 3.43% 2016 ............................. 853,258, 347 1.72% Growth from 2007 to 2016 ............................................. (8.74%) Notes: (1) Source: the Iowa Department of Revenue. Total Valuation with TIF ..................................... (2) Fiscal years 2007 and 2008 amounts reflect a year ending $4,826,647,177 March 31st. 2.11%(5) (3) Percentage change based on 2006 Taxable Sales amount of $901,481,066. PROPERTY ASSESSMENT AND TAX INFORMATION Property and Trend of Valuations Actual (100%) Valuations for the City(1)(2) Fiscal Year: 2012/13 2013/14 2014/15 Property Class Levy Year: 2011 2012 2013 Residential........................................................ $3,285,609,160 $3,371,854,560 $3,495,700,460 Agricultural........................................................ 2,516,440 2,655,640 3,680,920 Commercial....................................................... 1,155,433,460 1,118,453,910 1,157,640,090 Industrial........................................................... 77,855,500 77,291,810 80,494,880 Multi-residential(3)............................................. 0 0 0 Railroads........................................................... 2,619,932 3,205,451 3,827,506 Utilities without Gas & Electric(4)....................... 11,051,685 10,816,940 9,599,528 Gas & Electric Utility(4)...................................... 83,538,109 87,100,183 78,642,915 Less: Military Exemption ................................. (3.096.542) (3.059.502) (2.939.122) Total Valuation with TIF ..................................... $4,615,527,744 $4,668,318,992 $4,826,647,177 Percent Change ................................................ 2.11%(5) 1.14% 3.39% Notes: (1) Source: Iowa Department of Management. (2) Includes tax increment finance (TIF) valuations used in the following amounts: 2015/16 2014 $3,617,590,930 3,553,520 1,155,761,766 76,495,918 0 4,015,580 8,239,789 87,728,294 (2.828.002) $4,950,557,795 2.57% January1: 2011 2012 2013 2014 TIF Valuation (included above).... $11,712,327 $14,113,908 $21,131,574 $42,307,287 (3) New Class as of January 1, 2015, previously reported as Commercial Property. (4) See "PROPERTY TAX INFORMATION - Utility Property Tax Replacement' herein. (5) Based on 2010 Actual Valuation of $4,520,142,100. The remainder of this page was left blank intentionally. W 2016/17 2015 $3,893,541,900 3,720,671 856,972,664 79,053,598 415,208,021 4,096,577 7,375,066 92,987,351 (2.727.9941 $5,350,227,854 8.07% 2015 $72,650,838 City oflowa City, Johnson County, Iowa $5.235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000' Water Revenue Bonds, Series 2017C For the January 1, 2015 levy year, the City's Taxable Valuation was comprised of approximately 63% residential, 23% commercial, 10% multi -residential, 2% industrial, 2% utilities and less than 1% agriculture and military exemption. Property and Trend of Valuations Taxable ("Rollback") Valuations for the City(1)(2) Fiscal Year: 2012/13 2013/14 2014/15 2015/16 2016/17 Property Class Levy Year: 2011 2012 2013 2014 2015 Residential........................................................ $1,667,396,105 $1,780,898,909 $1,901,667,703 $2,016,210,314 $2,165,817,742 Agricultural........................................................ 1,447,988 1,591,636 1,597,501 1,588,496 1,706,955 Commercial....................................................... 1,155,433,460 1,118,453,910 1,099,758,752 1,040,185,590 771,275,414 Industrial........................................................... 77,855,500 77,291,810 76,470,143 68,846,326 71,148,238 Multi-residential(3)............................................. 0 0 0 0 358,117,010 Railroads........................................................... 2,619,932 3,205,451 3,636,130 3,614,022 3,686,919 Utilities without Gas & Electric(4) ....................... 11,051,685 10,816,940 9,599,528 8,239,789 7,375,066 Gas & Electric Utility(4)...................................... 47,404,050 46,813,214 47,004,994 46,785,426 44,986,783 Less: Military Exemption ................................. (3.096,542) (3.059.502) (2.939.122) (2.828,002) (2,727,994) Total Valuation with TIF ..................................... $2,960,112,178 $3,036,012,368 $3,136,795,629 $3,182,641,961 $3,421,386,133 Percent Change ................................................ 3.93%(5) 2.56% 3.32% 1.46% 7.50% Notes: (1) Source: Iowa Department of Management. (2) Includes tax increment finance (TIF) valuations used in the following amounts: January 1: 2011 2012 2013 2014 TIF Valuation (included above).... $11,712,327 $14,113,908 $21,131,574 $33,331,128 (3) New Class as of January 1, 2015, previously reported as Commercial Property. (4) See "PROPERTY TAX INFORMATION - Utility Property Tax Replacement" herein. (5) Based on 2010 Taxable Valuation of $2,848,162,606. Larger Taxpayers(1) Taxpayer Name Business/Service ACTInc......................................................................... Commercial .................................. MidAmericanEnergy.....................................................Utility............................................ Ann S. Gerdin Revocable Trust ..................................... Commercial .................................. Dealer Properties IC LLC ............................................... Commercial .................................. Procter & Gamble Hair Care LLC... ...... . ........................ Industrial ....................................... Christian Retirement Services Inc .................................. Retirement.................................... MidWestOne Bank ......................................................... Banking ........................................ Vesper Iowa City LLC....................................................Apartments................................... AlplaInc........................................................................Industrial....................................... National Computer Systems Inc ..................................... Commercial .................................. Total............................................................................................................................ Ten Largest Taxpayers as Percent of City's 2015 Taxable Valuation ($3,421,386,133) 2015 $72,650,838 Levy Year 2015 Taxable Valuation(2) .............. $ 47,639,112 .............. 42,663,621 I ............. 22, 803, 280 .............. 18, 888, 867 .............. 16,414,333 .............. 15, 576, 959 .............. 15,014,313 I ............. 14,026,869 .............. 13, 860, 000 .............. 12.814.893 .............. $219,702,247 .............. 6.42% Notes: (1) Source: the County. (2) Every effort has been made to seek out and report the largest taxpayers. However, many of the taxpayers listed contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. The 2015 taxable is the most current available. The remainder of this page was left blank intentionally. A-7 City of Iowa City, Johnson County, lowa $5,235,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000' Water Revenue Bonds, Series 2017C CITY OF IOWA CITY JOHNSON COUNTY, IOWA FISCAL YEAR 2016 AUDITED FINANCIAL STATEMENTS City oflowa City, Johnson County, Iowa $5,135,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910.000' Water Revenue Bonds, Series 2017C APPENDIX C DESCRIBING BOOK -ENTRY -ONLY ISSUANCE 1. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds (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. 2. 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 ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a S&P Global Ratings rating of 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. 3. 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 (`Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book -entry system for the Securities is discontinued. 4. 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 effect 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. C-1 City of Iowa City, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C 5. 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. 6. 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. 7. 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). 8. 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 the Paying 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, the Paying 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 the Paying 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. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to any Tender/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 any Tender/Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book - entry credit of tendered Securities to any Tender/Remarketing Agent's DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. 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. 12. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. C-2 City ofI wa City, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bonds, Series 2077B $5,910,000• Wafer Revenue Bonds, Series2017C APPENDIX D DRAFT FORMS OF OPINIONS OF BOND COUNSEL We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Iowa City, State of Iowa (the "Issuer"), relating to the issuance of Sewer Revenue Refunding Bonds, Series 20178, by said City, dated 2017, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $ (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the resolution authorizing issuance of the Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: I. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2. The Resolution has been duly adopted by the Issuer and constitutes a valid and binding obligation of the Issuer enforceable upon the Issuer. The Resolution creates a valid lien on the Net Revenues of the Municipal Sewer Utility pledged by the Resolution for the security of the Bonds. The lien of the Bonds ranks on a parity as to the pledge of Net Revenues with respect to other Outstanding Obligations and Additional Obligations. The right to issue Additional Obligations is reserved upon conditions set forth in the Resolution. 3. The Bonds have been duly authorized, issued and delivered by the Issuer and ere valid and binding special obligations of the Issuer, payable solely from the sources provided therefor in the Resolution. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that most be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. wnrur4 a Balt' -1889, Guernsey 3 Bally -1893. Baily 6 Stipp -1901, Stipp, Perry, Bannster a Slarunpar-1914, sannmter. carpenter. Amery a Cooney -1950, Mani. Cooney O sler. NiMe, Hayme & Smith -1974, Ahlen, Cooney. DonseiW Hayne, SMth & None, P.C. -1990 D- I Ahlers a Cooney, P.C. AHLERS COONEY Attorneys a1 Law 100 Court Avenue, suite 600 A T T O R N E Y S On Moines, Iowa 50309-2231 Phone: 515243-7611 Fax: 515243-2149 www.ahlerelaw.com We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Iowa City, State of Iowa (the "Issuer"), relating to the issuance of Sewer Revenue Refunding Bonds, Series 20178, by said City, dated 2017, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $ (the "Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the resolution authorizing issuance of the Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: I. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2. The Resolution has been duly adopted by the Issuer and constitutes a valid and binding obligation of the Issuer enforceable upon the Issuer. The Resolution creates a valid lien on the Net Revenues of the Municipal Sewer Utility pledged by the Resolution for the security of the Bonds. The lien of the Bonds ranks on a parity as to the pledge of Net Revenues with respect to other Outstanding Obligations and Additional Obligations. The right to issue Additional Obligations is reserved upon conditions set forth in the Resolution. 3. The Bonds have been duly authorized, issued and delivered by the Issuer and ere valid and binding special obligations of the Issuer, payable solely from the sources provided therefor in the Resolution. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that most be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. wnrur4 a Balt' -1889, Guernsey 3 Bally -1893. Baily 6 Stipp -1901, Stipp, Perry, Bannster a Slarunpar-1914, sannmter. carpenter. Amery a Cooney -1950, Mani. Cooney O sler. NiMe, Hayme & Smith -1974, Ahlen, Cooney. DonseiW Hayne, SMth & None, P.C. -1990 D- I City of Iowa City, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bands, Series 2017B $5,910,000• Water Revenue Bonds, Series 2017C City of Iowa City, State of Iowa $ Sewer Revenue Refunding Bonds, Series 2017B Page 2 We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or other offering material relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth heroin. The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting crediton'rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. 013469044%10714-128 Respectfully submitted, IMA City oflowa City, Johnson County, Iowa $5,135,000- Sewer Revenue Refunding Bonds, Series 2017B $5,910,000- Wafer Revenue Bonds, Series 2017C Aslan 6 Cooney, P.C. �l—\',L\• AHLERS LOONEY 100 Cou&Ayenu 100 Coun Avenue, Suite 600 A T T R N E Y S Des Moines, Iowa 50309-2231 Phone: 515-243-7611 Fax: 515-243-2149 www.ahlerslaw.corn We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of Iowa City, State of Iowa (the "Issuer"), relating to the issuance of Water Revenue Bonds, Series 20170, by said City, dated 2017, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $ (the 'Bonds"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the resolution authorizing issuance of the Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: 1. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2. The Resolution has been duly adopted by the Issuer and constitutes a valid and binding obligation of the Issuer enforceable upon the Issuer. The Resolution creates a valid lien on the Net Revenues of the Municipal Water Utility pledged by the Resolution for the security of the Bonds. The lien of the Bonds ranks on a parity as to the pledge of Net Revenues with respect to other Outstanding Obligations and Additional Obligations. The right to issue Additional Obligations is reserved upon conditions set forth in the Resolution. 3. The Bonds have been duly authorized, issued and delivered by the Issuer and are valid and binding special obligations of the Issuer, payable solely from the sources provided therefor in the Resolution. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, such interest is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Issuer has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. Wistiar0 & early- 1888, Guernsey & sally- 1893, Baily & Stipp - IN1. S9pp, Perry, Bannister & SWainger- 1910. Bannister, Carpenter, Anlem & Cooney - 1950. Ahiers. Cooney, Dorweikr, Ain ee. Hayne It Bmitn - 1974, Mk1s, Cooney. Do fler, Haynie, Smith & N nee, P C - 1990 D-3 City oflowa City, Johnson County, Iowa $5,135,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* WalerRevenue Bonds, Series 2017C City of Iowa City, State of Iowa. $ Water Revenue Bonds, Series 2017C Page 2 We express no opinion regarding the accuracy, adequacy, or completeness of the. Official Statement or other offering material relating to the Bonds. Further, we express no opinion regarding tax consequences arising with respect to the Bonds other than as expressly set forth herein. The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting creditors'rights generally, and by equitable principles, whether considered at law or in equity. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. 01346897-1\10714-127 Respectfully submitted, M City ofIowa City, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000' Water Revenue Bonds, Series 2017C APPENDIX E DRAFT FORM OF CONTINUING DISCLOSURE CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Iowa City, State of Iowa (the "Issuer"), in connection with the issuance of $ Sewer Revenue Refunding Bonds, Series 2017B (the "Bonds") dated 2017. The Bonds are being issued pursuant to a Resolution of the Issuer approved on 2017 (the "Resolution"). The Issuer covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2 -12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Financial Information" shall mean financial information or operating data of the type included in the final Official Statement, provided at least annually by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Business Day" shall mean a day other than a Saturday or a Sunday or a day on which banks in Iowa are authorized or required by law to close. "Dissemination Agent" shall mean the Issuer or any Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Holders" shall mean the registered holders of the Bonds, as recorded in the registration books of the Registrar. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "Municipal Securities Rulemaking Board" or "MSRB" shall mean the Municipal Securities Rulemaking Board, 1300 I Street NW, Suite 1000, Washington, DC 20005. "National Repository" shall mean the MSRB's Electronic Municipal Market Access website, a/k/a "EMMA" (emma.msrb.org). "Official Statement" shall mean the Issuer's Official Statement for the Bonds, dated , 2017. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. E -I City of Iowa City, Johnson County, Iowa $5,135,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910.000* Water Revenue Bonds, Series 2017C "Rule" shall mean Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State" shall mean the State of Iowa Section 3. Provision of Annual Financial Information a) The Issuer shall, or shall cause the Dissemination Agent to, not later than two hundred ten (210) days after the end of the Issuer's fiscal year (presently June 30th), commencing with information for the 2016/2017 fiscal year, provide to the National Repository an Annual Financial Information filing consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Financial Information filing must be submitted in such format as is required by the MSRB (currently in "searchable PDF" format). The Annual Financial Information filing may be submitted as a single document or as separate documents comprising a package. The Annual Financial Information filing may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Financial Information filing and later than the date required above for the filing of the Annual Financial Information if they are not available by that date. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). b) If the Issuer is unable to provide to the National Repository the Annual Financial Information by the date required in subsection (a), the Issuer shall send a notice to the Municipal Securities Rulemaking Board, if any, in substantially the form attached as Exhibit A. c) The Dissemination Agent shall: i. each year file Annual Financial Information with the National Repository; and H. (if the Dissemination Agent is other than the Issuer), file a report with the Issuer certifying that the Annual Financial Information has been filed pursuant to this Disclosure Certificate, stating the date it was filed. Section 4. Content of Annual Financial Information. The Issuer's Annual Financial Information filing shall contain or incorporate by reference the following: a) The last available audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under State law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with generally accepted accounting principles, noting the discrepancies therefrom and the effect thereof. If the Issuer's audited financial statements for the preceding years are not available by the time Annual Financial Information is required to be filed pursuant to Section 3(a), the Annual Financial Information filing shall contain unaudited financial statements of the type included in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Financial Information when they become available. E-2 City of Iowa City, Johnson County, Iowa $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C b) A table, schedule or other information prepared as of the end of the preceding fiscal year, of the type contained in the final Official Statement under the captions " Sewer System Rates and Charges", "Number of Sewer System Customers", "Larger Sewer System Customers", "Sales History and Sewer System Charges", and "Sewer System Debt Information". Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been filed with the National Repository. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events. a) Pursuant to the provisions of this Section, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than 10 Business Days after the day of the occurrence of the event: i. Principal and interest payment delinquencies; ii. Non-payment related defaults, if material; iii. Unscheduled draws on debt service reserves reflecting financial difficulties; iv. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; v. Substitution of credit or liquidity providers, or their failure to perform; vi. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Series Bonds, or material events affecting the tax-exempt status of the Bonds; vii. Modifications to rights of Holders of the Bonds, if material; viii. Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers; ix. Defeasances of the Bonds; x. Release, substitution, or sale of property securing repayment of the Bonds, if material; xi. Rating changes on the Bonds; xii. Bankruptcy, insolvency, receivership or similar event of the Issuer; xiii. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an E-3 City oflowa City, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000- Water Revenue Bonds, Series 2017C action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and xiv. Appointment of a successor or additional trustee or the change of name of a trustee, if material. b) Whenever the Issuer obtains the knowledge of the occurrence of a Listed Event, the Issuer shall determine if the occurrence is subject to notice only if material, and if so shall as soon as possible determine if such event would be material under applicable federal securities laws. c) If the Issuer determines that knowledge of the occurrence of a Listed Event is not subject to materiality, or determines such occurrence is subject to materiality and would be material under applicable federal securities laws, the Issuer shall promptly, but not later than 10 Business Days after the occurrence of the event, file a notice of such occurrence with the Municipal Securities Rulemaking Board through the filing with the National Repository. Section 6. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Certificate with respect to each Series of Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds of that Series or upon the Issuer's receipt of an opinion of nationally recognized bond counsel to the effect that, because of legislative action or final judicial action or administrative actions or proceedings, the failure of the Issuer to comply with the terms hereof will not cause Participating Underwriters to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended. Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. Section 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: a) If the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. E-4 City of Iowa City, Johnson County, Iowa $5,235,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000* Water Revenue Bonds, Series 2017C In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Financial Information filing, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if ffie amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(c), and (ii) the Annual Financial Information filing for the year in which the change is made will present a comparison or other discussion in narrative form (and also, if feasible, in quantitative form) describing or illustrating the material differences between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Financial Information filing or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Financial Information filing or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Financial Information filing or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the issuer to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate. Direct, indirect, consequential and punitive damages shall not be recoverable by any person for any default hereunder and are hereby waived to the extent permitted by law. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds, Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. E-5 City oflowa City, Johnson County, Iowa 55,135,000' Sewer Revenue Refunding Bonds, Series 1017B $5,910,000- Water Revenue Bonds, Series 2017C Date: day of , 2017. ATTEST: By: City Clerk CITY OF IOWA CITY, STATE OF IOWA LIE EXHIBIT A NOTICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL FINANCIAL INFORMATION Name of Issuer: City of Iowa City, Iowa. Name of Bond Issue: $ Sewer Revenue Refunding Bonds, Series 2017B Dated Date of Issue: .2017 NOTICE IS HEREBY GIVEN that the Issuer has not provided Annual Financial Information with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Financial Information will be filed by Dated: day of 20 01346901-1\10714-128 CITY OF IOWA CITY, STATE OF IOWA By: Its: l= City of Iowa City, Johnson County, Iowa $5.235.000* Sewer Revenue Refunding Bonds, Series 2017B $5,910.000' Water Revenue Bonds, Series 2017C CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the City of Iowa City, State of Iowa (the "Issuer"), in connection with the issuance of $ Water Revenue Bonds, Series 2017C (the "Bonds") dated , 2017. The Bonds are being issued pursuant to a Resolution of the Issuer approved on , 2017 (the "Resolution"). The Issuer covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule I Sc2-12(6)(5). Section 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Financial Information" shall mean financial information or operating data of the type included in the final Official Statement, provided at least annually by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "Business Day" shall mean a day other than a Saturday or a Sunday or a day on which banks in Iowa are authorized or required by law to close. "Dissemination Agent" shall mean the Issuer or any Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Holders" shall mean the registered holders of the Bonds, as recorded in the registration books of the Registrar. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. "Municipal Securities Rulemaking Board" or "MSRB" shall mean the Municipal Securities Rulemaking Board, 13001 Street NW, Suite 1000, Washington, DC 20005. "National Repository" shall mean the MSRB's Electronic Municipal Market Access website, a/k/a "EMMA" (emma.msrb.org). "Official Statement" shall mean the Issuer's Official Statement for the Bonds, dated , 2017. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Rule" shall mean Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. E-7 City of Iowa City, Johnson Carry, Iowa $5, 235,000• Sewer Revenue Refunding Bonds. Series 2017B $5,910,000' Water Revenue Bonds. Series 2017C "State" shall mean the State of Iowa Section 3. Provision of Annual Financial Information a) The Issuer shall, or shall cause the Dissemination Agent to, not later than two hundred ten (2 10) days after the end of the Issuer's fiscal year (presently June 30th), commencing with information for the 2016/2017 fiscal year, provide to the National Repository an Annual Financial Information filing consistent with the requirements of Section 4 of this Disclosure Certificate. The Annual Financial Information filing must be submitted in such format as is required by the MSRB (currently in "searchable PDF" format). The Annual Financial Information filing may be submitted as a single document or as separate documents comprising a package. The Annual Financial Information filing may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Financial Information filing and later than the date required above for the filing of the Annual Financial Information if they are not available by that date. If the Issuer's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). b) If the Issuer is unable to provide to the National Repository the Annual Financial Information by the date required in subsection (a), the Issuer shall send a notice to the Municipal Securities Rulemaking Board, if any, in substantially the form attached as Exhibit A. c) The Dissemination Agent shall: L each year file Annual Financial Information with the National Repository; and ii. (if the Dissemination Agent is other than the Issuer), file a report with the Issuer certifying that the Annual Financial Information has been filed pursuant to this Disclosure Certificate, stating the date it was filed. Section 4. Content of Annual Financial Information. The Issuer's Annual Financial Information filing shall contain or incorporate by reference the following a) The last available audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under State law, as in effect from time to time, or, if and to the extent such financial statements have not been prepared in accordance with generally accepted accounting principles, noting the discrepancies therefrom and the effect thereof. if the Issuer's audited financial statements for the preceding years are not available by the time Annual Financial Information is required to be filed pursuant to Section 3(a), the Annual Financial Information filing shall contain unaudited financial statements of the type included in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Financial Information when they become available. b) A table, schedule or other information prepared as of the end of the preceding fiscal year, of the type contained in the final Official Statement under the captions "Water System Rates and Charges", "Larger Water System Customers", "Water System Customers by Classification", "Sales History and Water System Charges", and "Water System Debt Information". W. City oflova City. Johnson County, lova $5,135,000' Sewer Revenue Refunding Bonds, Series 2017B $5,910,000' Water Revenue Bonds, Series 2017C Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been filed with the National Repository. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events. a) Pursuant to the provisions of this Section, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than 10 Business Days after the day of the occurrence of the event: i. Principal and interest payment delinquencies; ii. Non-payment related defaults, if material; iii. Unscheduled draws on debt service reserves reflecting financial difficulties; iv. Unscheduled draws on credit enhancements relating to the Bonds reflecting financial difficulties; v. Substitution of credit or liquidity providers, or their failure to perform; vi. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the Series Bonds, or material events affecting the tax-exempt status of the Bonds; vii. Modifications to rights of Holders ofthe Bonds, if material; viii. Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers; ix. Defeasances of the Bonds; x. Release, substitution, or sale of property securing repayment of the Bonds, if material; xi. Rating changes on the Bonds; xii. Bankruptcy, insolvency, receivership or similar event of the Issuer; xiii. The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and xiv. Appointment of a successor or additional trustee or the change of name of a trustee, if material. E-9 City of lmva City. Johnson County, lova $5,135.000' Sewer Revenue Refunding Bonds, Series 1017B $5,910,000' Nater Revenue Bonds, Series 2017C b) Whenever the Issuer obtains the knowledge of the occurrence of a Listed Event, the Issuer shall determine if the occurrence is subject to notice only if material, and if so shall as soon as possible determine if such event would be material under applicable federal securities laws. c) If the Issuer determines that knowledge of the occurrence of a Listed Event is not subject to materiality, or determines such occurrence is subject to materiality and would be material under applicable federal securities laws, the Issuer shall promptly, but not later than 10 Business Days after the occurrence of the event, file a notice of such occurrence with the Municipal Securities Rulemaking Board through the filing with the National Repository. Section 6. Termination of Reporting Obligation. The Issuer's obligations under this Disclosure Certificate with respect to each Series of Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds of that Series or upon the issuer's receipt of an opinion of nationally recognized bond counsel to the effect that, because of legislative action or finaljudicial action or administrative actions or proceedings, the failure of the Issuer to comply with the terms hereof will not cause Participating Underwriters to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended. Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Certificate. The initial Dissemination Agent shall be the Issuer. Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: a) If the amendment or waiver relates to the provisions of Section 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Resolution for amendments to the Resolution with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Financial Information filing, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(c), and (ii) the Annual Financial Information filing for E-10 City oflowa City, Johnson County, Iowa 55,135.000' Seiner Rn-enue Refunding Bonds, Series 10I7B S5,9I0.000• !rater Rn-enue Bonds, Series 2017C the year in which the change is made will present a comparison or other discussion in narrative form (and also, if feasible, in quantitative form) describing or illustrating the material differences between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Financial Information filing or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Financial Information filing or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have no obligation under this Certificate to update such information or include it in any future Annual Financial Information filing or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate. Direct, indirect, consequential and punitive damages shall not be recoverable by any person for any default hereunder and are hereby waived to the extent permitted by law. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. Section 11. Duties. Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Date: day of 2017. ATTEST: By: City Clerk CITY OF IOWA CITY, STATE OF IOWA 0 E-11 Mayor City ofIowa City, Johnson County. Iowa $5.135.000' Sewer Rnenue Refunding Bonds, Series 20I7B S5.9/0,000' Water Revenue Bonds. Series 201 7C EXHIBIT A NOTICE TO NATIONAL REPOSITORY OF FAILURE TO FILE ANNUAL FINANCIAL INFORMATION Name of Issuer: City of Iowa City, Iowa. Name of Bond Issue: $ Water Revenue Bonds, Series 2017C Dated Date of Issue: 2017 NOTICE IS HEREBY GIVEN that the Issuer has not provided Annual Financial Information with respect to the above-named Bonds as required by Section 3 of the Continuing Disclosure Certificate delivered by the Issuer in connection with the Bonds. The Issuer anticipates that the Annual Financial Information will be filed by Dated: day of 20_ CITY OF IOWA CITY, STATE OF IOWA By: Its: E-12 SERIES 2017B OFFICIAL BID FORM — SEWER BONDS City of Iowa City 410 E. Washington Street Iowa City, Iowa 52240 Council Members: May 2, 2017 Speer Financial, Inc. Facsimile: (319) 291-8628 For the $5,235,000` Sewer Revenue Refunding Bonds, Series 2017B (the "Sewer Bonds"), of the City of Iowa City, Johnson County, Iowa (the "City"), as described in the annexed Official Terms of Offering, which is expressly made a part of this bid, we will pay you $ (no less than $5,182,650). The Sewer Bonds are to bear interest at the following respective rates (each a multiple of 1/8 or 1/100 of 1%) for the Sewer Bonds of each designated maturity. AMOUNTS* AND MATURITIES — JULY 1 $275,000............2018 % $855,000............2020 % $ 835,000 .......... 2021 500,000 ............ 2019 % 2,770,000 ......... 2022 Any consecurim marmiBes may be aggregated into term bonds ar the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. Term Maturity_ Maturities: Term Maturity *Subject to principal adjustment in accordance with the Oficial Terms of Offering. The Sewer Bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa. The City will pay for the legal opinion. The Purchaser agrees to apply for CUSIP numbers and pay the fee charged by the CUSIP Service Bureau and will accept the Sewer Bonds with the CUSIP numbers as entered on the Sewer Bonds. As evidence of our good faith, if we are the winning bidder, we will wire transfer the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time to the City's good faith bank and under the terms provided in the Official Terms of Offering for the Sewer Bonds. Alternatively, we have wire transferred or enclosed herewith a check payable to the City in the amount of the Deposit under the terms provided in the Official Terms of Offering for the Sewer Bonds. Attached hereto is a list of members of our account on whose behalf this bid is made. Form of Deposit (Check One) Priorto Bid Opening: Certified/Cashier's Check Wire Transfer Account Manager Information UndmwtiterBank [] [ ] Address Within TWO Hours of Bid Opening: Authorized Rep Wire Transfer [ 1 City Amount: S104,700 Direct Phone L FAX Number L E -Mail Address We have purchased Insurance from: Name of Insurer (Please fill in) Premium: Maturities: (Check One) [J Years The foregoing bid was accepted and the Sewer Bonds sold by resolution of the City on May 2, 2017, and receipt is hereby acknowledged of the good faith Deposit which is being held in accordance with the terms of the annexed Official Terms of Offering. ATTEST: City Mayor NOT PART OFTHE BID (Calculation o true interest cost Grass Interest s Less Premfum(Plus Discount S Tate Interest Cort s True Interest Rate TOTAL BOND YEARS 21,262.67 AVERAGE LIFE 4.062 Years CITY OF IOWA CITY Johnson County, Iowa City oflowa City, Johnson County. Iowa $5.235,000' Sewer Revenue Refunding Bonds, Series 2017B Page I of5 SERIES 2017B OFFICIAL TERMS OF OFFERING $5,235,000* CITY OF IOWA CITY Johnson County, Iowa Sewer Revenue Refunding Bonds, Series 2017B The City of Iowa City, Johnson County, Iowa, (the "City"), will receive electronic bids on the SpeerAuction ("SpeerAuction") website address "www.SpeerAuction.com" for its $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B (the "Sewer Bonds"), on an all or none basis between 10:00 A.M. and 10:30 A.M., C.D.T., Tuesday, May 2, 2017. To bid electronically, bidders must have: (1) completed the registration form on the SpeerAuction website, and (2) requested and received admission to the City's sale (as described below). The City will also receive sealed bids for the Sewer Bonds, on an all or none basis, at City Hall, 410 E. Washington Street, Iowa City, Iowa, until 10:30 A.M., C.D.T., Tuesday, May 2, 2017. The City will also receive facsimile bids at (319) 291-8628 for the Sewer Bonds, on an all or none basis, until 10:30 A.M., C.D.T., Tuesday, May 2, 2017. Upon receipt, facsimile bids will be sealed and treated as a sealed bids, and along with all other sealed bids will be publicly opened and, together with any electronic bids, read. Award will be made or all bids rejected at a meeting of the City on that date. The City reserves the right to reject all bids, to reject any bid proposal not conforming to this Official Terms of Offering, and to waive any irregularity or informality with respect to any bid. Additionally, the City reserves the right to modify or amend this Official Terms of Offering; however, any such modification or amendment shall not be made less than twenty-four (24) hours prior to the date and time for receipt of bids on the Sewer Bonds and any such modification or amendment will be announced on the Amendments Page of the SpeerAuction webpage and through Thomson Municipal News. The Sewer Bonds and the interest thereon shall be payable solely and only out of the net revenues of the City's Municipal Sewer System and from amounts on deposit in the Sewer Sinking Fund and Sewer Reserve Fund. The Sewer Bonds shall not be a debt of nor a charge against the State of Iowa nor of the City within the meaning of any constitutional or statutory limitation or provision and are not payable in any manner by taxation, and the City shall not be liable by reason of the failure of the net revenues to be sufficient for the payment of the Bonds. The City will furnish the written approving opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, evidencing legality of the Sewer Bonds and that the interest thereon is exempt from Federal income taxes as and to the extent discussed under the heading "TAX MATTERS" in the Official Statement for the Sewer Bonds. The Sewer Bonds will be in fully registered form in the denominations of $5,000 and integral multiples thereof in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal and interest payments on the Sewer Bonds will be paid. Individual purchases will be in book -entry form only. Interest on each Sewer Bonds shall be paid by check or draft of the Bond Registrar to the person in whose name such Sewer Bond is registered at the close of business on the fifteenth day of the month next preceding an interest payment date on such bond. The principal of the Sewer Bonds shall be payable in lawful money of the United States of America at the principal office maintained for the purpose by the Bond Registrar in St. Paul, Minnesota. Semiannual interest is due January 1 and July 1 of each year, commencing January 1, 2018 and is payable by U.S. Bank, St. Paul, Minnesota (the "Bond Registrar"). The Sewer Bonds are dated the date of delivery (expected to be on or about June 15, 2017). AMOUNTS* AND MATURITIES—JULY 1 $275,000 ........................2018 $855,000........................2020 $ 835,000 ..................... 2021 500,000 ........................2019 2,770,000 .................... 2022 Any consecudve maturities maybe aggregated into rerm bonds at the optian ofthe bidder, in which case the mandatory redemption prosdsions shat be on the same schedule as above. The Sewer Bonds are not subject to optional redemption prior to maturity. 'ADJUSTMENTS TO PRINCIPAL AMOUNTAFTER DETERMINATION OFBESTBID. The aggregate principal amort oftie Sewer Bonds, and each schedhded mato ity thereof, are subject to increase or redaction by the City or its designee afer the determination of the Winning Bidder. The City may increase or decrease each maturity in increments of $5,000, but the total amount to be issued will not esceed $5,235.0004 Interest rates specified by the Winning Bidderfor each m anvity will not change. Final adjustments shall be in dee sole discretion ofthe City. The dollar amount ofthe purchase price proposed by the Winning Bidder will be Banged if the aggregate principal amount of the Sewer Bonds is adjusted as described above. Any change in the principal amount ofany maturity of the Sewer Bonds will be made while maintaining, as closely as possible, the Winning Bidder's net compensation, calculated asapercentageofbondprincipal. The Winning Bidder may not withdraw or modify its bid as a result ofanypost-bid adjustment. Any adfstment shall be conclusive, andshall be binding upon the Winning Bidder. City oflova City, Johnson County, Iowa 55,235.000• Sewer Rn,enue Refunding Bonds, Series 20I7B Page 2 of 5 Method of Bidding Electronically Notwithstanding the fact that the City permits receiving bids electronically using SpeerAuction, all bidders must have a signed, but uncompleted, Official Bid Form delivered to Speer Financial, Inc., Suite 608, 531 Commercial Street, Waterloo, Iowa, (319) 291-8628 facsimile, prior to the close of bidding to which a printout of the electronic bid will be attached and delivered to the City. All -or -none bids must be submitted via the internet address www.SpeerAuction.com. The use of SpeerAuction shall be at the bidder's risk and expense and the City shall have no liability with respect thereto, including (without limitation) liability with respect to incomplete, late arriving and non -arriving bids. To bid via the SpeerAuction webpage, bidders must first visit the SpeerAuction webpage where, if they have not previously registered with either SpeerAuction, Grant Street Group (the "Auction Administrator") or any other website administered by the Auction Administrator, they may register and then request admission to bid on the Sewer Bonds. Bidders will be notified prior to the scheduled bidding time of their eligibility to bid. Only registered broker-dealers and dealer banks with DTC clearing arrangements will be eligible to bid electronically. The "Rules" of the SpeerAuction bidding process may be viewed on the SpeerAuction webpage and are incorporated herein by reference. Bidders must comply with the Rules of SpeerAuction in addition to the requirements of the City's Official Terms of Offering. In the event the Rules of SpeerAuction and this Official Terms of Offering conflict, this Official Terms of Offering shall be controlling. All electronic bids must be submitted on the SpeerAuction webpage. Electronic bidders may change and submit bids as many times as they choose during the sale period but may not delete a submitted bid. The last bid submitted by an electronic bidder before the deadline for receipt of bids will be compared to all other final bids to determine the winning bidder. During the bidding, no bidder will see any other bidder's bid nor the status of their bid relative to other bids (e.g., whether their bid is a leading bid). The electronic bidder bears all risk of transmission failure. Any questions regarding bidding on the SpeerAuction website should be directed to Grant Street Group at (412) 391-5555 x 370. Each bidder shall be solely responsible for making necessary arrangements to access SpeerAuction for purposes of submitting its internet bid in a timely manner and in compliance with the requirements of the Terms of Offering. The City is permitting bidders to use the services of the SpeerAuction solely as a communication mechanism to conduct the internet bidding and the SpeerAuction is not an agent of the City. Provisions of the Notice of Sale, Terms of Offering or Official Bid Form shall control in the event of conflict with information provided by the Internet Bid System. Electronic Facsimile Biddine: Bids may be submitted via facsimile at (319) 291-8628. Electronic facsimile bids will be sealed and treated as sealed bids. Neither the City nor its agents will assume liability for the inability of the bidder to reach the above named fax numbers prior to the time of sale specified above. Transmissions received after the deadline will be rejected. Bidders electing to submit bids via facsimile transmission bear full and complete responsibility for the transmission of such bid. Neither the City nor its agents will assume responsibility for the inability of the bidder to reach the above specified fax number prior to the time of sale. Time of receipt shall be the time recorded by the person receiving facsimile and shall be conclusive. Bidding Parameters and Award of the Sewer Bonds All interest rates must be in multiples of one-eighth or one one-hundredth of one percent (1/8 or 1/100 of 1%), and not more than one rate for a single maturity shall be specified. The rates bid shall be in non -descending order. The differential between the highest rate bid and the lowest rate bid shall not exceed five percent (5%). All bids must be for all of the Sewer Bonds and must be for not less than $5,182,650. City ofloira City. Johnson Counp. Iona $5,235,000' Sewer Revenue Refunding Bands, Series 2017E Page 3 of 5 Award of the Sewer Bonds: The Sewer Bonds will be awarded on the basis of true interest cost, determined in the following manner. True interest cost shall be computed by determining the annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the Sewer Bonds from the payment dates thereof to the dated date and to the bid price. For the purpose of calculating true interest cost, the Sewer Bonds shall be deemed to become due in the principal amounts and at the times set forth in the table of maturities set forth above. In the event two or more qualifying bids produce the identical lowest true interest cost, the winning bid shall be the bid that was submitted first in time on the SpeerAuction webpage or if all such bids are not submitted electronically, the winning bid shall be determined by lot. The Sewer Bonds will be awarded to the bidder complying with the terms of this Official Terms of Offering whose bid produces the lowest true interest cost rate to the City as determined by the City's Registered Municipal Advisor, which determination shall be conclusive and binding on all bidders; provided, that the City reserves the right to reject all bids or any non -conforming bid and reserves the right to waive any informality in any bid. Electronic bidders should verify the accuracy of their final bids and compare them to the winning bids reported on the SpeerAuction Observation Page immediately after the bidding. The premium or discount, if any, is subject to pro rata adjustment if the maturity amounts of the Sewer Bonds are changed, allowing the same dollar amount of profit per $1,000 bond as bid. The true interest cost of each electronic bid will be computed by SpeerAuction and reported on the Observation Page of the SpeerAuction webpage immediately following the date and time for receipt of bids. These true interest costs are subject to verification by the City's Municipal Advisor, will be posted for information purposes only and will not signify an actual award of any bid or an official declaration of the winning bid. The City or its Municipal Advisor will notify the bidder to whom the Sewer Bonds will be awarded, if and when such award is made. The winning bidder will be required to make the standard filings and maintain the appropriate records routinely required pursuant to MSRB Rules G-8, G-11 and G-36. The winning bidder will be required to pay the standard MSRB charge for Sewer Bonds purchased. In addition, the winning bidder who is a member of the Securities Industry and Financial Markets Association ("S1FMA") will be required to pay SIFMA's standard charge per Sewer Bond. The winning purchaser will be required to certify to the City immediately after the opening of bids: (i) the initial public offering price of each maturity of the Sewer Bonds (not including bond houses and brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Sewer Bonds (not less than 10% of each maturity) were sold to the public; or (ii) if less than 10% of any maturity has been sold, the price for that maturity determined as of the time of the sale based upon the reasonably expected initial offering price to the public; and (iii) that the initial public offering price does not exceed their fair market value of the Sewer Bonds on the sale date. The winning purchaser will be required to provide a certificate satisfactory to Bond Counsel and the City at closing confirming the information required by this paragraph. Good Faith Deposit and Other Matters The winning bidder is required to a wire transfer from a solvent bank or trust company to the City's good faith bank the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time as evidence of the good faith of the bidder. Alternatively, a bidder may submit its Deposit upon or prior to the submission of its bid in the form of a certified or cashier's check on, or a wire transfer from, a solvent bank or trust company for TWO PERCENT OF PAR payable to the Treasurer of the City. The City reserves the right to award the Sewer Bonds to a winning bidder whose wire transfer is initiated but not received within such two hour time period provided that such winning bidder's federal wire reference number has been received. In the event the Deposit is not received as provided above, the City may award the Sewer Bonds to the bidder submitting the next best bid provided such bidder agrees to such award. City of Iowa City, Johnson County, Iowa $5,135,000' Sewer Revenue Refunding Bonds, Series 2017B Page 4 of 5 If a wire transfer is used for the Deposit, it must be sent according to the following wire instructions: Amalgamated Bank of Chicago Corporate Trust 30 North LaSalle Street 38' Floor Chicago, IL 60602 ABA # 071003405 Credit To: 3281 Speer Bidding Escrow RE: City of Iowa City, Johnson County, Iowa bid for $5,235,000* Sewer Revenue Refunding Bonds, Series 2017B If the wire shall arrive in such account prior to the date and time of the sale of the Sewer Bonds. Contemporaneously with such wire transfer, the prospective purchaser shall send an email to biddingescrow@aboc.com with the following information: (1) indication that a wire transfer has been made, (2) the amount of the wire transfer, (3) the issue to which it applies, and (4) the return wire instructions if such prospective purchaser is not awarded the Sewer Bonds. The City and any prospective purchaser who chooses to wire the Deposit hereby agree irrevocably that Speer Financial, Inc. ("Speer") shall be the escrow holder of the Deposit wired to such account subject only to these conditions and duties: (i) if the bid is not accepted, Speer shall, at its expense, promptly return the Deposit amount to the unsuccessful prospective purchaser; (ii) if the bid is accepted, the Deposit shall be forwarded to the City, (iii) Speer shall bear all costs of maintaining the escrow account and returning the funds to the prospective purchaser; (iv) Speer shall not be an insurer of the Deposit amount and shall have no liability except if it willfully fails to perform, or recklessly disregards, its duties specified herein; and (v) income earned on the Deposit, if any, shall be retained by Speer. The City covenants and agrees to enter into a written agreement, certificate or contract, constituting an undertaking (the "Undertaking") to provide ongoing disclosure about the City for the benefit of the beneficial owners of the Sewer Bonds on or before the date of delivery of the Sewer Bonds as required under Section (b)(5) of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Undertaking shall be as described in the Official Statement, with such changes as may be agreed in writing by the Underwriter. The Underwriter's obligation to purchase the Sewer Bonds shall be conditioned upon the City delivering the Undertaking on or before the date of delivery of the Sewer Bonds. The Sewer Bonds will be delivered to the successful purchaser against full payment in immediately available funds as soon as they can be prepared and executed, which is expected to be on or about June 15, 2017. Should delivery be delayed beyond sixty (60) days from the date of sale for any reason beyond the control of the City except failure of performance by the purchaser, the City may cancel the award or the purchaser may withdraw the good faith deposit and thereafter the purchaser's interest in and liability for the Sewer Bonds will cease. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts, and interest rates of the Sewer Bonds, and any other information required by law or deemed appropriate by the City, shall constitute a "Final Official Statement" of the City with respect to the Sewer Bonds, as that term is defined in the Rule. By awarding the Sewer Bonds to any underwriter or underwriting syndicate, 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 Sewer Bonds are awarded, up to 50 copies of the Final Official Statement to permit each "Participating Underwriter" (as that term is defined in the Rule) to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Sewer Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the Sewer Bonds agrees thereby that if its bid is accepted by the City it shall enter into a contractual relationship with all Participating Underwriters of the Sewer Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. City of Iowa City. Johnson County, Iowa 55.235.000' Seurr Rn•enue Refunding Bonds, Series 20/78 Page 5 of By submission of its bid, the senior managing underwriter of the successful purchaser agrees to supply all necessary pricing information and any Participating Underwriter identification necessary to complete the Official Statement within 24 hours after award of the Sewer Bonds. Additional copies of the Final Official Statement may be obtained by Participating Underwriters from the printer at cost. The City will, at its expense, deliver the Sewer Bonds to the purchaser in New York, New York (or arrange for "FAST" delivery) through the facilities of DTC and will pay for the bond attorney's opinion. At the time of closing, the City will also furnish to the purchaser the following documents, each dated as of the date of delivery of the Sewer Bonds: (1) the legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa, that the Sewer Bonds are lawful and enforceable obligations of the City in accordance with their terms; (2) the opinion of said attorneys that the interest on the Sewer Bonds is exempt from federal income taxes as and to the extent set forth in the Official Statement for the Sewer Bonds; and (3) a no litigation certificate by the City. The City does not intend to designate the Sewer Bonds as "qualified tax-exempt obligations" pursuant to the small issuer exception provided by Section 265(b) (3) of the Internal Revenue Code of 1986, as amended. The City has authorized the printing and distribution of an Official Statement containing pertinent information relative to the City and the Sewer Bonds. Copies of such Official Statement or additional information may be obtained from Mr. Dennis Bockenstedt, Finance Director, City of Iowa City, 410 E. Washington Street, Iowa City, Iowa 52240 or an electronic copy of this Official Statement is available from the www.speerfinancial.com website under "Official Statement Sales/Competitive Calendar" or from the Registered Municipal Advisor to the City, Speer Financial, Inc., 531 Commercial Street, Suite 608, Waterloo, Iowa 50701 (telephone (319) 291-2077), and One North LaSalle Street, Suite 4100, Chicago, Illinois 60602 (telephone (312) 346-3700). /s/ DENNIS BOCKENSTEDT Finance Director CITY OF IOWA CITY Johnson County, Iowa SERIES 2017C OFFICIAL BID FORM — WATER BONDS City of Iowa City 410 E. Washington Street Iowa City, Iowa 52240 Council Members: May 2, 2017 Speer Financial, Inc. Facsimile: (319) 291-6628 For the $5,910,000* Water Revenue Bonds, Series 2017C (the "Water Bonds"), of the City of Iowa City, Johnson County, Iowa (the "City"), as described in the annexed Official Terms of Offering, which is expressly made a part of this bid, we will pay you $ (no less than $5,850,900). The Water Bonds are to bear interest at the following respective rates (each a multiple of 1/8 or 1/100 of la/o) for the Water Bonds of each designated maturity. AMOUNTS* AND MATURITIES—JULY 1 $610,000............2018 % $695,000............2021 % $1,225,000.........2023 % 635,000 ............ 2019 % 725,000 ............ 2022 % 800,000 ......... 2024 % 665.000 ............ 2020 % 555.000 ......... 2025 Any conseeutire maturides may be aggregated into term bonds at the option ofthe bidder, in which cos the mandatory redemption provisions shall be on the sonic schedule as above. Maturities: Term Maturity_ Maturities: Tern, Ala(urity Maturities: Tenn Maturity_ Maturilicia Term Maturity_ *Subject to principal adjustment in accordance with the Official Terms of Offering. The Water Bonds are to be executed and delivered to us in accordance with the terms of this bid accompanied by the approving legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa. The City will pay for the legal opinion. The Purchaser agrees to apply for CUSIP numbers and pay the fee charged by the CUSIP Service Bureau and will accept the Water Bonds with the CUSIP numbers as entered on the Water Bonds. As evidence of our good faith, if we are the winning bidder, we will wire transfer the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time to the City's good faith bank and under the terms provided in the Official Terms of Offering for the Water Bonds. Alternatively, we have wire transferred or enclosed herewith a check payable to the City in the amount of the Deposit under the terms provided in the Official Terms of Offering for the Water Bonds. Attached hereto is a list of members of our account on whose behalf this bid is made. Form of Deposit (Check One) Prior to Bid Ooenine: Cerlified/Cashier's Check Wire Transfer Account Mamaeer Information UnderveriterBank [] [ ] Address Within TWO Hours of Did Opening: Wire Transfer [ ] Amount: 5118,200 Authorized Rep City State/Zip Direct Phone ( _) FAX Number ( ) E -Mail Address We have purchased Insurance from: Name of Insurer (Pleaseftil in) Maturities: (Check One) U Years The foregoing bid was accepted and the Water Bonds sold by resolution of the City on May 2, 2017, and receipt is hereby acknowledged of the good faith Deposit which is being held in accordance with the terms of the annexed Official Terms of Offering. ATTEST: CITY OF IOWA CITY Johnson County, Iowa City Clerk Mayor NOT PART OF THE BID (Calculation o(true interest cost) InterestremiuWPlus Discountnterest F Cost $ a cerst Rote % TOTAL BOND YEARS 27,932.67 AVERAGELIFE 4.726 Years City oflmca City, Johnson County, Anva 55,9/0,000' {Yater Revenue Bonds, Series 2017C Page 1 of 5 SERIES 2017C OFFICIAL TERMS OF OFFERING $5,910,000* CITY OF IOWA CITY Johnson County, Iowa Water Revenue Bonds, Series 2017C The City of Iowa City, Johnson County, Iowa, (the "City"), will receive electronic bids on the SpeerAuction ("SpeerAuction") website address "www.SpeerAuction.com" for its $5,910,000* Water Revenue Bonds, Series 2017C (the "Water Bonds"), on an all or none basis between 10:30 A.M. and 11:00 A.M., C.D.T., Tuesday, May 2, 2017. To bid electronically, bidders must have: (1) completed the registration form on the SpeerAuction website, and (2) requested and received admission to the City's sale (as described below). The City will also receive sealed bids for the Water Bonds, on an all or none basis, at City Hall, 410 E. Washington Street, Iowa City, Iowa, until 11:00 A.M., C.D.T., Tuesday, May 2, 2017. The City will also receive facsimile bids at (319) 291-8628 for the Water Bonds, on an all or none basis, until 11:00 A.M., C.D.T., Tuesday, May 2, 2017. Upon receipt, facsimile bids will be sealed and treated as a sealed bids, and along with all other sealed bids will be publicly opened and, together with any electronic bids, read. Award will be made or all bids rejected at a meeting of the City on that date. The City reserves the right to reject all bids, to reject any bid proposal not conforming to this Official Terms of Offering, and to waive any irregularity or informality with respect to any bid. Additionally, the City reserves the right to modify or amend this Official Terms of Offering; however, any such modification or amendment shall not be made less than twenty-four (24) hours prior to the date and time for receipt of bids on the Water Bonds and any such modification or amendment will be announced on the Amendments Page of the SpeerAuction webpage and through Thomson Municipal News. The Water Bonds and the interest thereon shall be payable solely and only out of the net revenues of the City's Municipal Water System and from amounts on deposit in the Water Sinking Fund and Water Reserve Fund. The Water Bonds shall not be a debt of nor a charge against the State of Iowa nor of the City within the meaning of any constitutional or statutory limitation or provision and are not payable in any manner by taxation, and the City shall not be liable by reason of the failure of the net revenues to be sufficient for the payment of the Water Bonds. The City will furnish the written approving opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, evidencing legality of the Water Bonds and that the interest thereon is exempt from Federal income taxes as and to the extent discussed under the heading "TAX MATTERS" in the Official Statement for the Water Bonds. The Water Bonds will be in fully registered form in the denominations of $5,000 and integral multiples thereof in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), New York, New York, to which principal and interest payments on the Water Bonds will be paid. Individual purchases will be in book -entry form only. Interest on each Water Bonds shall be paid by check or draft of the Bond Registrar to the person in whose name such Water Bond is registered at the close of business on the fifteenth day of the month next preceding an interest payment date on such bond. The principal of the Water Bonds shall be payable in lawful money of the United States of America at the principal office maintained for the purpose by the Bond Registrar in St. Paul, Minnesota. Semiannual interest is due January 1 and July 1 of each year, commencing January 1, 2018 and is payable by U.S. Bank, St. Paul, Minnesota (the "Bond Registrar"). The Water Bonds are dated the date of delivery (expected to be on or about June 15, 2017). AMOUNTS* AND MATURITIES — JULY 1 $610,000 ........................2018 $695,000........................2021 $1,225,000....................2023 635,000 ........................2019 725,000 ........................ 2022 800,000....................2024 665,000 ........................2020 555,000 .................... 2025 Any consecutive maturities may be aggregated into term bonds at floe option of the bidder, in which case floe mandatory redemption provisions shall be on file sane schedule as above The Water Bonds due July 1, 2018 - 2022, inclusive, are non -callable. The Water Bonds due June 1, 2023 - 2025, inclusive, are callable in whole or in part and on any date on or after July 1, 2022, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in any order of maturity as determined by the City and within any maturity by lot. -ADJUSTMENTS TO PRINCIPAL AMOUNTAFTER DETERMINATION OFBESTBID. The aggregateprincipal amount ofthe Water Bonds, and eachscheduled maturity thereof, are subject to increase or reduction by the City or is designee after the determination ofthe Wirming Bidder. The City may increase or decrease each mmuriryin increments ofS5,000, but the total amount to beIssued.ill aot esceed 55.910,000'. Interest raiesspecified by the Il tmdng Bidder for each maturity w/I not change. final adjustments shall be in the sole discretion ofthe City. The dollar amount ofthe purchase price proposed by the Winning Bidder udl be changed ifthe aggregate principal amount ofthe (Vater Bonds is adjusted as described above. Arty change in the principal amount ofany maturity ofthe Water Bonds .ill be made while maintaining, as closely as passible, the Winning Bidder's net compensation. calculated as a percentage ofb..d principal. The Winning Bidder may not.iddrow or modify is bid as a resultofanypost-bid adjustment. Any adjustment shall be conclusive, andsholl be binding upon the Winning Bidder. City oflowa City, Johnson Count,, Iowa $5,910,000* Water Revenue Bonds, Series 2017C Page 1 of5 Method of Bidding Electronically Notwithstanding the fact that the City permits receiving bids electronically using SpeerAuction, all bidders must have a signed, but uncompleted, Official Bid Form delivered to Speer Financial, Inc., Suite 608, 531 Commercial Street, Waterloo, Iowa, (319) 291-8628 facsimile, prior to the close of bidding to which a printout of the electronic bid will be attached and delivered to the City. All -or -none bids must be submitted via the internet address www.SpecrAuction.com. The use of SpeerAuction shall be at the bidder's risk and expense and the City shall have no liability with respect thereto, including (without limitation) liability with respect to incomplete, late arriving and non -arriving bids. To bid via the SpeerAuction webpage, bidders must first visit the SpeerAuction webpage where, if they have not previously registered with either SpeerAuction, Grant Street Group (the "Auction Administrator") or any other website administered by the Auction Administrator, they may register and then request admission to bid on the Water Bonds. Bidders will be notified prior to the scheduled bidding time of their eligibility to bid. Only registered broker-dealers and dealer banks with DTC clearing arrangements will be eligible to bid electronically. The "Rules" of the SpeerAuction bidding process may be viewed on the SpeerAuction webpage and are incorporated herein by reference. Bidders must comply with the Rules of SpeerAuction in addition to the requirements of the City's Official Terms of Offering. In the event the Rules of SpeerAuction and this Official Terms of Offering conflict, this Official Terms of Offering shall be controlling. All electronic bids must be submitted on the SpeerAuction webpage. Electronic bidders may change and submit bids as many times as they choose during the sale period but may not delete a submitted bid. The last bid submitted by an electronic bidder before the deadline for receipt of bids will be compared to all other final bids to determine the winning bidder. During the bidding, no bidder will see any other bidder's bid nor the status of their bid relative to other bids (e.g., whether their bid is a leading bid). The electronic bidder bears all risk of transmission failure. Any questions regarding bidding on the SpeerAuction website should be directed to Grant Street Group at (412) 391-5555 x 370. Each bidder shall be solely responsible for making necessary arrangements to access SpeerAuction for purposes of submitting its internet bid in a timely manner and in compliance with the requirements of the Terms of Offering. The City is permitting bidders to use the services of the SpeerAuction solely as a communication mechanism to conduct the internet bidding and the SpeerAuction is not an agent of the City. Provisions of the Notice of Sale, Terms of Offering or Official Bid Form shall control in the event of conflict with information provided by the Internet Bid System. Electronic Facsimile Bidding: Bids may be submitted via facsimile at (319) 291-8628. Electronic facsimile bids will be sealed and treated as sealed bids. Neither the City nor its agents will assume liability for the inability of the bidder to reach the above named fax numbers prior to the time of sale specified above. Transmissions received after the deadline will be rejected. Bidders electing to submit bids via facsimile transmission bear full and complete responsibility for the transmission of such bid. Neither the City nor its agents will assume responsibility for the inability of the bidder to reach the above specified fax number prior to the time of sale. Time of receipt shall be the time recorded by the person receiving facsimile and shall be conclusive. Bidding Parameters and Award of the Water Bonds All interest rates must be in multiples of one-eighth or one one-hundredth of one percent (1/8 or 1/100 of 1%), and not more than one rate for a single maturity shall be specified. The rates bid shall be in non -descending order. The differential between the highest rate bid and the lowest rate bid shall not exceed five percent (5%). All bids must be for all of the Water Bonds and must be for not less than $5,850,900. City oflova City, Johnson Connn, Iowa 55.9/0,000' {Vater Revenue Bonds. Series 2017C Page 3 of 5 Award of the Water Bonds: The Water Bonds will be awarded on the basis of true interest cost, determined in the following manner. True interest cost shall be computed by determining the annual interest rate (compounded semi-annually) necessary to discount the debt service payments on the Water Bonds from the payment dates thereof to the dated date and to the bid price. For the purpose of calculating true interest cost, the Water Bonds shall be deemed to become due in the principal amounts and at the times set forth in the table of maturities set forth above. In the event two or more qualifying bids produce the identical lowest true interest cost, the winning bid shall be the bid that was submitted first in time on the SpeerAuction webpage or if all such bids are not submitted electronically, the winning bid shall be determined by lot. The Water Bonds will be awarded to the bidder complying with the terms of this Official Terns of Offering whose bid produces the lowest true interest cost rate to the City as determined by the City's Registered Municipal Advisor, which determination shall be conclusive and binding on all bidders; provided, that the City reserves the right to reject all bids or any non -conforming bid and reserves the right to waive any informality in any bid. Electronic bidders should verify the accuracy of their final bids and compare them to the winning bids reported on the SpeerAuction Observation Page immediately after the bidding. The premium or discount, if any, is subject to pro rata adjustment if the maturity amounts of the Water Bonds are changed, allowing the same dollar amount of profit per $1,000 bond as bid. The true interest cost of each electronic bid will be computed by SpeerAuction and reported on the Observation Page of the SpeerAuction webpage immediately following the date and time for receipt of bids. These true interest costs are subject to verification by the City's Municipal Advisor, will be posted for information purposes only and will not signify an actual award of any bid or an official declaration of the winning bid. The City or its Municipal Advisor will notify the bidder to whom the Water Bonds will be awarded, if and when such award is made. The winning bidder will be required to make the standard filings and maintain the appropriate records routinely required pursuant to MSRB Rules G-8, G-11 and G-36. The winning bidder will be required to pay the standard MSRB charge for Water Bonds purchased. In addition, the winning bidder who is a member of the Securities Industry and Financial Markets Association ("SIFMA") will be required to pay SIFMA's standard charge per Water Bond. The winning purchaser will be required to certify to the City immediately after the opening of bids: (i) the initial public offering price of each maturity of the Water Bonds (not including bond houses and brokers or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Water Bonds (not less than 10% of each maturity) were sold to the public; or (ii) if less than 10% of any maturity has been sold, the price for that maturity determined as of the time of the sale based upon the reasonably expected initial offering price to the public; and (iii) that the initial public offering price does not exceed their fair market value of the Water Bonds on the sale date. The winning purchaser will be required to provide a certificate satisfactory to Bond Counsel and the City at closing confirming the information required by this paragraph. Good Faith Deposit and Other Matters The winning bidder is required to a wire transfer from a solvent bank or trust company to the City's good faith bank the amount of TWO PERCENT OF PAR (the "Deposit") WITHIN TWO HOURS after the bid opening time as evidence of the good faith of the bidder. Alternatively, a bidder may submit its Deposit upon or prior to the submission of its bid in the form of a certified or cashier's check on, or a wire transfer from, a solvent bank or trust company for TWO PERCENT OF PAR payable to the Treasurer of the City. The City reserves the right to award the Water Bonds to a winning bidder whose wire transfer is initiated but not received within such two hour time period provided that such winning bidder's federal wire reference number has been received. In the event the Deposit is not received as provided above, the City may award the Water Bonds to the bidder submitting the next best bid provided such bidder agrees to such award. City of lova City, Johnson Comity, /omra $5,910.000' ;Voter Revenue Bands, Series 2017C Page 4 of5 If a wire transfer is used for the Deposit, it must be sent according to the following wire instructions: Amalgamated Bank of Chicago Corporate Trust 30 North LaSalle Street 38' Floor Chicago, IL 60602 ABA # 071003405 Credit To: 3281 Speer Bidding Escrow RE: City of Iowa City, Johnson County, Iowa bid for $5,910,000* Water Revenue Bonds, Series 2017C If the wire shall arrive in such account prior to the date and time of the sale of the Water Bonds. Contemporaneously with such wire transfer, the prospective purchaser shall send an email to biddingescrow@aboc.com with the following information: (1) indication that a wire transfer has been made, (2) the amount of the wire transfer, (3) the issue to which it applies, and (4) the return wire instructions if such prospective purchaser is not awarded the Water Bonds. The City and any prospective purchaser who chooses to wire the Deposit hereby agree irrevocably that Speer Financial, Inc. ("Speer") shall be the escrow holder of the Deposit wired to such account subject only to these conditions and duties: (i) if the bid is not accepted, Speer shall, at its expense, promptly return the Deposit amount to the unsuccessful prospective purchaser; (ii) if the bid is accepted, the Deposit shall be forwarded to the City, (iii) Speer shall bear all costs of maintaining the escrow account and returning the funds to the prospective purchaser; (iv) Speer shall not be an insurer of the Deposit amount and shall have no liability except if it willfully fails to perform, or recklessly disregards, its duties specified herein; and (v) income earned on the Deposit, if any, shall be retained by Speer. The City covenants and agrees to enter into a written agreement, certificate or contract, constituting an undertaking (the "Undertaking") to provide ongoing disclosure about the City for the benefit of the beneficial owners of the Water Bonds on or before the date of delivery of the Water Bonds as required under Section (b)(5) of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934. The Undertaking shall be as described in the Official Statement, with such changes as may be agreed in writing by the Underwriter. The Underwriter's obligation to purchase the Water Bonds shall be conditioned upon the City delivering the Undertaking on or before the date of delivery of the Water Bonds. The Water Bonds will be delivered to the successful purchaser against full payment in immediately available funds as soon as they can be prepared and executed, which is expected to be on or about June 15, 2017. Should delivery be delayed beyond sixty (60) days from the date of sale for any reason beyond the control of the City except failure of performance by the purchaser, the City may cancel the award or the purchaser may withdraw the good faith deposit and thereafter the purchaser's interest in and liability for the Water Bonds will cease. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts, and interest rates of the Water Bonds, and any other information required by law or deemed appropriate by the City, shall constitute a "Final Official Statement" of the City with respect to the Water Bonds, as that term is defined in the Rule. By awarding the Water Bonds to any underwriter or underwriting syndicate, 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 Water Bonds are awarded, up to 50 copies of the Final Official Statement to permit each "Participating Underwriter" (as that term is defined in the Rule) to comply with the provisions of such Rule. The City shall treat the senior managing underwriter of the syndicate to which the Water Bonds are awarded as its designated agent for purposes of distributing copies of the Final Official Statement to each Participating Underwriter. Any underwriter executing and delivering an Official Bid Form with respect to the Water Bonds agrees thereby that if its bid is accepted by the City it shall enter into a contractual relationship with all Participating Underwriters of the Water Bonds for purposes of assuring the receipt by each such Participating Underwriter of the Final Official Statement. City oflowa City, Johnson County, lawn $5,910,000' Water Revenue Bonds, Series 1017C Page 5 of 5 By submission of its bid, the senior managing underwriter of the successful purchaser agrees to supply all necessary pricing information and any Participating Underwriter identification necessary to complete the Official Statement within 24 hours after award of the Water Bonds. Additional copies of the Final Official Statement may be obtained by Participating Underwriters from the printer at cost. The City will, at its expense, deliver the Water Bonds to the purchaser in New York, New York (or arrange for "FAST" delivery) through the facilities of DTC and will pay for the bond attorney's opinion. At the time of closing, the City will also furnish to the purchaser the following documents, each dated as of the date of delivery of the Water Bonds: (1) the legal opinion of Ahlers & Cooney, P.C., Des Moines, Iowa, that the Water Bonds are lawful and enforceable obligations of the City in accordance with their terms; (2) the opinion of said attorneys that the interest on the Water Bonds is exempt from federal income taxes as and to the extent set forth in the Official Statement for the Water Bonds; and (3) a no litigation certificate by the City. The City does not intend to designate the Water Bonds as "qualified tax-exempt obligations" pursuant to the small issuer exception provided by Section 265(b) (3) of the Internal Revenue Code of 1986, as amended. The City has authorized the printing and distribution of an Official Statement containing pertinent information relative to the City and the Water Bonds. Copies of such Official Statement or additional information may be obtained from Mr. Dennis Bockenstedt, Finance Director, City of Iowa City, 410 E. Washington Street, Iowa City, Iowa 52240 or an electronic copy of this Official Statement is available from the www.speerfinancial.com website under "Official Statement Sales/Competitive Calendar" or from the Registered Municipal Advisor to the City, Speer Financial, Inc., 531 Commercial Street, Suite 608, Waterloo, Iowa 50701 (telephone (319) 291-2077), and One North LaSalle Street, Suite 4100, Chicago, Illinois 60602 (telephone (312) 346-3700). /s/ DENNIS BOCKENSTEDT Finance Director CITY OF IOWA CITY Johnson County, Iowa Julie Vo aril Im From: City of Iowa City<CityoflowaCity@public.govdelivery.com> Sent: Thursday, April 27, 2017 8:18 AM To: Simon Andrew Subject: City earns Aaa bond rating O SHARE Having trouble viewing this email? View it as a Web page. °=°� IOWA CITY FOR IMMEDIATE RELEASE Date: 04/27/2017 Contact: Dennis Bockenstedt, Finance Director Phone: 319-356-5053 City of Iowa City earns Aaa bond rating Moody's Investors Service has awarded the City of Iowa City the highest credit rating possible, an Aaa bond rating, for its upcoming 2017 general obligation bond issue. The City has maintained an Aaa rating since November 1973 on its general obligation bonded debt. The top tier Aaa rating ranks Iowa City among the most financially stable cities in the state of Iowa and the nation. The Moody's rating is used by banking authorities and investors to evaluate the potential risk of loans, bonds, and other financial transactions with municipalities and other governmental entities. A top rating by Moody's, a global market rating agency, represents the least amount of risk to investors. For Iowa City, it also represents financial savings for the City and taxpayers due to lower interest rates on loans for municipal projects. Moody's Investors Service has also awarded the City of Iowa City an Aa2 rating, the third highest rating possible, for its upcoming 2017 water and sewer revenue bond issues. Moody's reported that the City's water and sewer utilities have a stable service area, unlimited rate setting authority, strong system liquidity, and a modest debt profile. The Aa2 rating will assist the City in the issuance of refunding bonds to retire higher rate debt and achieve a net savings for the City. For more information City of Iowa City Finance Director Dennis Bockenstedt at 319-356-5053 or dennis-bockenstedt()iowacitv.org. Questions? Contact Us CITYOI I0R'AC11Y uWAncoarva urtume STAY CONNECTED: fIW[ii]inF SUBSCRIBER SERVICES: CREDIT OPINION Iowa City, IA 26 April 2017 New Issue - Moody's Assigns Aaa to Iowa City, IA's GO Bonds, New Issue Series 2017A Summary Rating Rationale Moody's Investors Service has assigned a Aaa rating to the City of Iowa City, IA's $9.8 million General Obligation Bonds, Series 2017A. Moody's maintains the Aaa rating on the city's previously issued general obligation unlimited tax (GOULT) debt. After the current sale, the city will have $51.6 million in outstanding GOULT debt. The outlook is stable. Contacts The Aaa rating reflects the city's growing and diverse tax base that benefits from the Coley J Anderson 312-706-9961 institutional presence of the State University of Iowa (Aa1 Stable); very healthy financial Analyst profile encompassing the city's sizeable reserves and prudent management; and slightly coley.anderson@nsoodys cons elevated debt burden. Rachel Cortez 312-706-9956 VP -Sr Credit Officer/ Credit Strengths Manager mchel.cortez@moodys.com » Growing tax base that benefits from the presence of the State University of Iowa » Robust unrestricted liquidity and available reserves » Strong financial management and material revenue raising flexibility Credit Challenges » Smaller tax base and weaker median family income levels relative to similarly rated entities » Pension burden is slightly elevated and expected to grow » Elevated fixed costs Rating Outlook The stable outlook reflects our expectation that the city's tax base will remain sound given ongoing economic development and the institutional stability provided by the University of Iowa. The outlook also reflects our expectation that the city's financial profile will remain healthy given prudent financial management. Factors that Could Lead to a Downgrade » Weakening of the city's tax base or resident income indices » Material reductions of operating reserves or available liquidity » Growth in the city's debt or pension burden MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Key Indicators Exhibit 1 loera CRY (CRY of) IA 2012 2013 2014 2015 2016 Base n1.un 74,877 Operating Flevenue($000) $ 76,197 $ 74,499 $ 66,287 $ 68,881 $ 67,634 Fuel Balance asa%of Flvenues 70.1% 68.6% 82.1% 83.1% 92.0% Call Baianceasa%of Fuvenues 107.1% 1032% 128.09/ 124.8% 130.7% Debt/Fansions NA Direct Det ($000) $ 83,721 $ 69,091 $ 74,431 $ 62,206 $ 58,086 Net Direct Debt / Operating Wierlues(x) 1.1x 0.9x 1.1x 0.9x 0.9x Net Direct Debt / Full Value(%) 1.8% 1.4% 1.50% 12a/, 1.1% Mai- aclusted Net Pardon Liability (3 -yr average) to Pevenues (x) N/A 1.5x 1.9z 1.7x 1.8x N/A 4.47 Tax base data is displayed ona levyyear basis. while financial information is displayed on a fiscal yearbasis. Source: AudtedFinancial Statements; US Census Recent Developments Since publishing our most recent credit opinion on May 3, 2016, the city released audited fiscal statements for fiscal 2016 that reflect a 21% increase in unassigned General Fund reserves, bringing the General fund balance to $23.4 million, or a healthy 43.8% of General Fund revenues. Detailed Rating Considerations Economy and Tax Base: Growing Tax Base Benefits From Significant Institutional Presence The city's tax base will likely experience long-term growth given ongoing economic development activity and the institutional stability provided by the University of Iowa. The city is located 115 miles east of Des Moines (Aa2 stable) and 32 miles southeast of Cedar Rapids (Aal stable). Inclusive of a 2.7% increase in assessment year 2016, the city's tax base has grown at an annual average rate of 3.5% over the last five years to its current $5.5 billion. The city has also realized steady growth in population, growing 9% from 2000 to 2010 and 8% from 2010 to 2015. Iowa City serves as a regional economic center for portions of eastern Iowa. The University of Iowa is the city's largest employer with more than 18,600 employees, and the university's hospital system employs an additional 8,700 people. Several of the city's other major employers are also in the education sector, including Pearson Educational Measurement (1,200 employees) and ACT, Inc. (1,100 employees). Building permit activity peaked in 2016 with 794 permits issued with an estimated value of $388 million. In the three years leading up to 2016, the city issued an average of 688 building permits, with an average total valuation of $158 million. Employment opportunities within the city and surrounding region are strong, as evidenced by the city's low unemployment rate of 2.5% as of February 2017 Median family income within the city is above average estimated at 113.8% of the nation, despite a large student population. Financial Operations and Reserves: Ample Reserves and Prudent Management Underpin Financial Stability The city's financial profile will likely remain a credit strength given ample reserves, prudent management and material revenue raising flexibility. Aided by steady revenue growth, available General Fund reserves have increased each of the last seven years. Notably, This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab an the issuer/entity page on www .moodyscom for the most updated credit rating action information and rating history. 26 April 2017 Iowa City, IA: New Issue - Moody's Assigns Asa to Iowa City, IA's CO Bonds, Series 2017A 1011V'S INVFSTC surpluses in fiscal years 2010 through 2013 were inflated by the collection of sales tax revenue that is committed to flood remediation efforts (Gateway Project). In May 2009, voters approved a 1% local option sales tax that expired at the end of fiscal 2013. As of fiscal 2016, restricted sale tax reserves within the General Fund totaled $18.2 million. The city's unrestricted General Fund reserves totaled $29.3 million or a very healthy 53% of General Fund revenues. The city also maintains substantial reserves within its Internal Service Fund. As of fiscal 2016, the city's Internal Service Fund had an unrestricted net position of $24.8 million. Across the city's operating funds (combined General, Debt Service, Employee Benefits and Internal Service Funds) available reserves totaled $62.2 million, or a very strong 92% of operating fund revenues. The city's re -estimated fiscal 2017 budget reflects a $1.8 million reduction in unrestricted General Fund reserves to $27.4 million. The budgeted draw is primarily driven by a $2.5 million capital contribution for a new public works facility. Restricted General Fund reserves are expected to be drawn down entirely by the close of fiscal 2017 for flood remediation projects. The city has budgeted for a $282,000 General Fund surplus in fiscal 2018. LIQUIDITY The city's cash position is strong. At the close of fiscal 2016, cash across the city's operating funds totaled $88.4 million, or 130.7% of operating revenues. We expect the city will maintain strong liquidity in the coming years. Debt and Pensions: Slightly Elevated Debt and Pension Burden; Rapid Principal Amortization The city's debt profile will likely remain manageable despite planned future borrowings, given rapid principal amortization and continued tax base growth. At 1.5% of full valuation and 1.2 times operating revenue, the city's debt burden is slightly elevated compared to the national median for the rating category. Debt service expenditures have historically accounted for an elevated 20% of operating fund revenues. When combining debt service, pension and other post employment benefit (OPEB) expenditures, the city's fixed costs totaled $19.9 million, or an elevated 29% of operating fund revenues in fiscal 2016. The city's high fixed costs are partially related to its aggressive approach for retiring existing debt. Over the next ten years, nearly all principal on existing GO debt is set to be retired. The city plans to issue approximately $34 million in additional GO debt through 2020 as part of its five-year capital plan. The city operates a self-funded medical and dental plan that is offered to all current and retired employees and their dependents. The plan is funded on a pay-as-you-go basis. Plan contributions in fiscal 2016 were $360,000 or 0.5 % of operating revenues. As of July 1, 2014, the most recent actuarial valuation date, the plan had an unfunded actuarial accrued liability of $5.1 million or a low 0.1 times operating fund revenue. Currently, pensions are not a significant credit pressure for the city. However, unfunded pension liabilities and employer contributions are expected to rise over the near term due to poor investment performance and changes in actuarial assumptions by the statewide public pension plans in which the city participates. The city's three year average Moody's Adjusted Net Pension Liability (ANPL), which incorporates adjustments we make to reported pension data, amounted to $119 million or a slightly elevated 1.8 times operating revenues and 2.2% of full valuation. The city's fiscal 2016 contribution to the plans was $4.8 million or 7% of operating fund revenue. DEBT STRUCTURE All of the city's debt is fixed rate and long-term. The city's debt profile includes S51.6 million in GO debt, $15.2 million in tax increment revenue debt and $14.5 million in lease revenue debt for the purchase of the Harrison Street Parking Ramp, DEBT -RELATED DERIVATIVES The city is not party to any derivative agreements. PENSIONS AND OPER Iowa City participates in two defined benefit multiple -employer cost-sharing plans, the Iowa Public Employees' Retirement System (IPERS) and Municipal fire and Police Retirement System of Iowa (MFPRSI). On an annual basis, each plan establishes local government retirement contributions as a share of annual payroll based on actuarial requirements. The city has routinely made its full statutory contributions; however, unfunded liabilities are expected to grow over the near term primarily because investment returns have fallen short of plan assumptions. In aggregate, all participating governments contributed well above the "tread water" indicator in fiscal 2015. The tread water indicator is the annual employer contribution required to prevent unfunded liabilities from growing if plan assumptions hold. Despite making 3 26 April 2017 Iowa City, IA: New Issue - Moody's Assigns Aaa to Iowa City, IA's GO Bonds, Series 2017A MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE contributions above tread water, plan level ANPLs for IPERS and MFPRSI grew 36% from fiscal 2015 to 2016. Due to a 12 month balance sheet reporting lag, significant growth in plan unfunded liabilities in 2016 will not be reflected in local government balance sheets until fiscal 2017 for most Iowa municipalities. IPERS and MFPRSI contributions were 96% and 153% of tread water in fiscal 2016 In March 2017, IPERS reduced its assumed investment return to 7.0% from 75%. The change will increase reported unfunded pension liabilities and necessitate higher government contributions to keep pace with reported plan funding needs. The next opportunity for the plans to enact an increase in contribution rates would impact government budgets beginning July 1, 2018. Management and Governance: Very Strong Institutional Framework and Prudent Management Iowa cities have an Institutional Framework score of Aaa, which is very strong. Institutional Framework scores measure a sector's legal ability to increase revenues and decrease expenditures. Even with property tax caps on general and emergency levies, cities have strong revenue -raising flexibility due to various additional levies, including an unlimited levy for employee benefits. Unpredictable revenue fluctuations tend to be minor. Across the sector, fixed and mandated costs are generally moderate. Iowa has public sector unions, which can limit the ability to cut expenditures. However, in 2017, the state legislator changed public union laws to limit non-public safety negotiations to base wages. Expenditures mostly consist of personnel costs, which are highly predictable. The city retains material revenue raising flexibility. As of fiscal 2017, untapped property tax revenue authority was estimated at $3.2 million. The city could generate an additional $4 million by fully utilizing its gas and electric franchise fee authority. Management has a history of positive budget to actual variances for revenues and expenditures. The city's reserve policy states that the unassigned fund balance in the General Fund will equal between 20% and 30% of combined revenues and transfers in. Fund balances in excess of 30% are transferred to the City's Emergency Fund. Reserves within the emergency fund are intended to support debt retirement, property tax relief, disaster mitigation or other fiscal emergencies. Legal Security The city's outstanding GO unlimited tax debt, including the 2017A bonds, are secured by a dedicated property tax levy, which is unlimited as to rate and amount. Use of Proceeds Proceeds from the 2017A Bonds will finance various capital construction and reconstruction projects, including street and park improvements. Obligor Profile Iowa City is a growing municipality located in eastern Iowa. As of 2015, the city had an estimated population of 73,415. Methodology The principal methodology used in this rating was US Local Government General Obligation Debt published in December 2016. 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('MJKK") Is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating O%a nitation ('NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that Is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No.2 and 3 respectively. MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK cr MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200.000 to approximately I PY35g000,000 MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements REPORT NUMBER 1068825 S 26 April 2017 Iowa City, At New Issue - Moody's Assigns Axa to Iowa City, IA's GO Bonds, Series 2017A Contacts Coley J Anderson Analyst coley anderson@moodys com MOODY'S INVESTORS SERVICE 312-706-9961 CLIENT SERVICES Americas Asia Pacific Japan EMEA 1-212-553-1653 852-3551-3077 81-3-5408-4100 44-20-7772-5454 ,. npi a 2C 17 Iowa City, IA: New Issue Moody's Assigns Aaa to Iowa City, IA's GO Bonds, Series 2017A CREDIT OPINION Iowa City Sewer Enterprise, IA 26 April 2017 New Issue - Moody's Assigns Aa2 to Iowa City IA's Sewer New Issue Revenue Bonds, Series 2017B Summary Rating Rationale Moody's Investors Service has assigned a Aa2 to Iowa City, IA's $5.2 million Sewer Revenue Refunding Capital Loan Bonds, Series 2017B. Moody's maintains the Aa2 rating on the city's outstanding sewer revenue bonds. Post -sale, the city will have $20.3 million in outstanding sewer revenue debt. Contacts The Aa2 rating incorporates the system's moderately sized and stable service area; adequate Coley I Anderson 312-706-9961 debt service coverage supported by a robust unrestricted cash position; unlimited rate setting Analyst authority; and modest debt position. coley.anderson@moodys corn Rachel Cortez 312-706-9956 Credit Strengths VP -Sr Credit o/%ced Manager » Stable service area that benefits from the institutional presence of the University of Iowa p y rachel.cortez@moodys.com D Unlimited rate setting authority v Robust system liquidity » Modest long-term leverage Credit Challenges D While historically stable, debt service coverage is more narrow than similarly rated entities Rating Outlook Outlooks are generally not assigned to local government credits with this amount of debt. Factors that Could Lead to an Upgrade Material expansion of the customer base D Improvement of debt service coverage Factors that Could Lead to a Downgrade D Weakening of debt service coverage Contraction of the system's customer base Key Indicators Exhibit 1 loins Qty (Qty o0 Sewer Enterprise, IA 2012 System Characteristics 2014 Amt corldtion (Nd Fixed Asset e/ Annual Depredation) 30 years 9y5an Sar - O& M (in $0005) 6,549 Service Area Wealth: MF % of US median 113.80% Legal Provisions 12,360 F1ate covenant (x) 1.10x Debt Service Foserve F6quirement DSFfunded d the lessor of standard 3 -prong test Financial 3rergth 6,549 Source Aud'tedFinandal Statements Recent Developments Since the utility's last rating report was published on May 3, 2016, audited statements for fiscal 2016 have been published and reflect a 9.4% increase in unrestricted cash to $18.2 million or 1,020 days of operations. Senior lien debt service coverage remained largely stable at 1.31 times in fiscal 2016. Detailed Rating Considerations Service Area and System Characteristics: Stable Service Area with Significant Institutional Presence The system's service area is expected to remain a credit strength given Iowa City's diverse economy and the institutional presence provided by the states flagship public university, the State University of Iowa (Aal stable) and the University of Iowa Hospitals and Clinics (Aa2 stable). The enterprise provides wastewater collection and treatment services to a service area largely coterminous with the city. The system benefits from the institutional presence provided by the University of Iowa and University of Iowa Hospitals and Clinics, which employ approximately 27,000 local residents combined. Median family income within the city is estimated at 113.8% of the national figure, which is high given the large number of university students living within the city. The sewer system is comprised of 300 miles of sanitary sewers, 18 lift stations and one wastewater treatment plant. As of fiscal 2016, the utility had 2S,08S customers, up 7% from fiscal 2012. While system customers are up, cubic feet of wastewater treated declined by 4% over that same period. The University is the system's largest user, accounting for 16% of charges in fiscal 2016. The system's ten largest customers accounted for an above average 30% of fiscal 2016 charges. While above average, the risk associated with the system's customer concentration is mitigated by the stability of its largest user. At the current rate of growth, management anticipates having sufficient capacity through 2040. The system's remaining useful life as calculated by Moody's is 30 years, demonstrating a lack of deferred system maintenance. The utility has no outstanding regulatory compliance issues. Debt Service Coverage and Liquidity: Satisfactory Debt Service Coverage; Strong Unrestricted Cash Position We expect the system's financial position to remain stable due to satisfactory debt service coverage levels, unlimited rate setting authority, and a robust cash position. At the close of fiscal 2016, debt service coverage on the system's outstanding senior lien This publication does not announce a credit ating action For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www moodys com for the most updated credit rating action information and rating history 2 26 April 2017 Iowa City Sewer Enterprise, IA: New Issue - Moody's Assigns Aa2 to Iowa City IA's Sewer Revenue Bonds, Series 2017B 2012 2013 2014 2015 2016 Operating Fkverhu s ($000) 12,815 12,934 12,634 12,315 12,360 9yden9as-O&M(in$0005) 5,663 5,340 5,708 6,622 6,549 Net ridded Dut1t ($000) 29,835 26,653 23,368 19,969 16,210 Annual Ddx SeiviceONereW (x) 1.19x 1.24x 1.54x 129x 131x Cash on Hand 938 days 1070 days 1114 days 917days 1015 days Ddx to Operating Pei (x) 23x 2.1x 1.8x 1.6x 1.3x Source Aud'tedFinandal Statements Recent Developments Since the utility's last rating report was published on May 3, 2016, audited statements for fiscal 2016 have been published and reflect a 9.4% increase in unrestricted cash to $18.2 million or 1,020 days of operations. Senior lien debt service coverage remained largely stable at 1.31 times in fiscal 2016. Detailed Rating Considerations Service Area and System Characteristics: Stable Service Area with Significant Institutional Presence The system's service area is expected to remain a credit strength given Iowa City's diverse economy and the institutional presence provided by the states flagship public university, the State University of Iowa (Aal stable) and the University of Iowa Hospitals and Clinics (Aa2 stable). The enterprise provides wastewater collection and treatment services to a service area largely coterminous with the city. The system benefits from the institutional presence provided by the University of Iowa and University of Iowa Hospitals and Clinics, which employ approximately 27,000 local residents combined. Median family income within the city is estimated at 113.8% of the national figure, which is high given the large number of university students living within the city. The sewer system is comprised of 300 miles of sanitary sewers, 18 lift stations and one wastewater treatment plant. As of fiscal 2016, the utility had 2S,08S customers, up 7% from fiscal 2012. While system customers are up, cubic feet of wastewater treated declined by 4% over that same period. The University is the system's largest user, accounting for 16% of charges in fiscal 2016. The system's ten largest customers accounted for an above average 30% of fiscal 2016 charges. While above average, the risk associated with the system's customer concentration is mitigated by the stability of its largest user. At the current rate of growth, management anticipates having sufficient capacity through 2040. The system's remaining useful life as calculated by Moody's is 30 years, demonstrating a lack of deferred system maintenance. The utility has no outstanding regulatory compliance issues. Debt Service Coverage and Liquidity: Satisfactory Debt Service Coverage; Strong Unrestricted Cash Position We expect the system's financial position to remain stable due to satisfactory debt service coverage levels, unlimited rate setting authority, and a robust cash position. At the close of fiscal 2016, debt service coverage on the system's outstanding senior lien This publication does not announce a credit ating action For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www moodys com for the most updated credit rating action information and rating history 2 26 April 2017 Iowa City Sewer Enterprise, IA: New Issue - Moody's Assigns Aa2 to Iowa City IA's Sewer Revenue Bonds, Series 2017B revenue debt was 1.31 times. Budgetary projections for fiscal 2017 reflect an improvement of debt service coverage to 1.53 times. The improvement is largely driven by reduced debt service expenditures and lower personnel costs. LIQUIDITY As of fiscal 2016, the system's unrestricted cash reserves totaled $18.2 million and a very strong 1,020 days cash on hand. The utility maintains additional $6.2 million in other restricted cash and a debt service reserve cash funded at $3.2 million. The city has a formal policy of maintaining minimum reserve levels to cover 30% of average annual operating revenues, a level it significantly exceeds. Debt and Legal Covenants: Modest Debt Ratio; Standard Legal Covenants We expect the system's debt ratio will remain modest based on limited future borrowing plans. Inclusive of the current refunding, the system's debt ratio is a modest 1.6 times system revenues. The city plans to issue $2 million in additional sewer revenue bonds in fiscal 2018 for various system improvements. Legal provisions include a rate covenant of 1.10 times; an additional bonds test of 1.25 times of maximum annual debt service (MADS) on all senior lien revenue bonds; and a debt service reserve requirement equal to the lesser of 10% of principal on senior lien bonds, MADS on all outstanding parity bonds, or 125% of average annual debt service on outstanding bonds. DEBT STRUCTURE All of the system's debt is fixed rate. DEBT -RELATED DERIVATIVES The system is not a party to any derivative agreements. 71:TtFN: . :101.121:1 Pension costs associated with the employees of the system were $143,000 in fiscal 2016 or 1% of system operating revenues. For more information on the City of Iowa City's pension obligations, please see our most recent rating report on the city's GO rating. Management and Governance: Full Rate Setting Authority; Strong Financial Management The Iowa City Sewer System is an enterprise of the City of Iowa City. City Council has complete authority to set rates and charges. The city's rate setting history is somewhat limited as the most recent rate adjustment was an 5% increase effective July 1, 2008. While rates are not regularly adjusted, management closely monitors cash flows and reviews rate sufficiency on a regular basis. Management has maintained stable debt service coverage and cash reserves that exceed the city's policy of 30% of average annual operating revenues. Legal Security Debt service on the system's revenue debt, including the Series 2017B Bonds, is secured by a senior lien on the net revenues of the sewer utility. Use of Proceeds Proceeds of the current issuance will be used to refund the city's Series 2009A bonds for an estimated net present value savings of 74%. Obligor Profile The sewer system provides wastewater collection and treatment services for the City of Iowa City. As of fiscal 2016, the utility had approximately 25,085 accounts. Methodology The principal methodology used in this rating was US Municipal Utility Revenue Debt published in December 2014. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology. 26 April 2017 Iowa City Sewer Enterprise, IA: New Issue - Moody's Assigns Aa2 to Iowa City IA's Sewer Revenue Bonds, Series 20178 Ratings Exhibit 2 Iowa City (City of) IA Sewer Enterprise Issue Rating Sewer Revenue Refunding Capital Loan Bonds, Aa2 Series 2017B Rating Type Underlying IT Sale Amount $5,235,000 Expected Sale Date 05/02/2017 Rating Description Revenue: Gowmment Enterprise Source: Moody'shwestorsSmite 4 26 Aped 2017 Iowa City Sewer Enterprise, IA: New Issue - Moody's Assigns Aa2 to Iowa City IA's Sewer Revenue Bonds, Series 20179 MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE © 2017 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (cpllectively,'MOODY'S"). All rights reserved. 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REPORT NUMBER 1068827 5 26 April 2017 Iowa City Sewer Enterprise, IA: New Issue - Moodys Assigns AaZ to Iowa City IA's Sewer Revenue Bonds, Series 2017B contacts Coley J Anderson Analyst Coley.anderson@moodys corn MOODY'S INVESTORS SERVICE 312-706-9961 CLIENT SERVICES Americas Asia Pacific Japan EMEA 1-212.553.1653 8SZ-3SS7-3077 81-3.5408-4100 44-20-7772-S4S4 26 Apia 2017 Iowa City Sewer Enterprise, IA: Naw Issue - Moody's Assigns Aa] to Iowa City IAs Sewer Revenue Bonds, Series 20178 CREDIT OPINION Iowa City Water Enterprise, IA 26 April 2017 New Issue - Moody's Assigns Aa2 to Iowa City, IAs Water New Issue Revenue Bonds, Series 2017C Summary Rating Rationale Moody's Investors Service has assinged a Aa2 rating to the City of Iowa City, IA's $5.9 million Water Revenue Capital Loan Bonds, Series 2017C. Moody's maintains the A82 rating on the city's outstanding water revenue debt. After the current sale, the city will have $13.2 million in outstanding water revenue debt. contacts The Aa2 rating incorporates the system's moderately sized and stable service area; sufficient Coleyl Anderson 312-706-9961 debt service coverage supported by a robust unrestricted cash position; unlimited rate setting Analyst authority; modest debt profile and adequate legal provisions. coley.anderson@moodys com Rachel Cortez 312-706-9956 Credit Strengths vasa creat o//rced n Stable service area that benefits from the institutional presence of the University of Iowa Manager rachetcortez@moodys.com u Unlimited rate setting authority zi Strong system liquidity a Modest debt profile Credit Challenges zi While historically stable, debt service coverage is more narrow than similarly rated entities Rating Outlook outlooks are generally not assigned to local government credits with this amount of debt. Factors that Could Lead to an Upgrade u Material expansion of the customer base » Improvement of debt service coverage Factors that Could Lead to a Downgrade u Weakening of debt service coverage D Contraction of the system's customer base Key Indicators Exhibit 1 Ipve *am Characteristics Asset Condition (Net Fixed Amts/ Annual Depreciat ion) 31 years 9yaem 9a - O& M (in $000s) 5,464 S rvice Area Wealth: MR % of USmedian 113,80% Leo Provisions Fate covenant (x) t10x Debt 3rvice Reserve FOquiremerlt DEFIFfunded at the lesser of standard 3 -prong tea Financial Strength 2012 2013 2014 2015 2016 Operating Ravenue($000) 8,445 8,757 8,459 8,540 9,151 Systern9a-O&M(in$000s) 5,653 6,348 5,818 5,708 5,464 Net Funded Debt ($000) 18,018 16,438 14,765 13,050 11,298 Annual Debt Service Coverage(x)(Sanior) 1A5x 1A9x 1.42x 1.50x 1.95x Cash on Hand 535 days 426 deers 561 days 554 days 567days Debt to Operating rllverlues(x) 2.tx 1.9x 1.7x 1.5x 125 Source: Auril'tedi'l ancbl Statements Recent Developments Since the utility's last rating report was published on May 3, 2016, audited statements for fiscal 2016 have been published and reflect a 2% reduction in unrestricted cash to $8.5 million and a still very healthy 575 days of operations. Senior lien debt service coverage improved to 1.9 times in fiscal 2016 from 1.5 times in fiscal 2015. Detailed Rating Considerations Service Area and System Characteristics: Stable Service Area with Significant Institutional Presence The system's service area is expected to remain a credit strength due to Iowa City's diverse economy and the institutional presence provided by the state's flagship public university, the State University of Iowa (Aa1 stable) and the University of Iowa Hospitals and Clinics (Aa2 stable). The enterprise provides water treatment and distribution services to a service area largely coterminous with the city. Unlike the city's sewer system, the University of Iowa and hospitals are not customers of the city's water system, although the water utility still benefits from their presence, which lends substantial institutional stability to the service area. Median family income within the city is estimated at 113.8% of the national figure, which is high given the large number of university students living within the city. The water system is comprised of nine vertical wells, one sand pit, one river intake, one water treatment facility, 78 million gallons of water storage and 273 miles of water distribution lines. As of fiscal 2016, the utility had 25,198 customers, up 2.2% from the prior year 3.5% from fiscal 2011. The city sold 255 million cubic feet of water in fiscal 2016, up 6% from fiscal 2015. The system's ten largest customers accounted for 13.4% of total water consumption in fiscal 2016. The systems largest user, The Procter & Gamble Company (Aa3 stable) accounted for 77% of total water usage in fiscal 2016 and reportedly maintains stable operations. At the current rate of growth, management anticipates having sufficient capacity for its customer base for at least the next 20 years. The system's remaining useful life as calculated by Moody's is 31 years, demonstrating a lack of deferred system maintenance. The utility has no outstanding regulatory compliance issues. This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history. 26 April 2017 Iowa City Water Enterprise, Ik New Issue - Moody's Assigns Aa2 to Iowa City, IA's Water Revenue Bonds. Series 2017C MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Debt Service Coverage and Liquidity: Improved Debt Service Coverage; Strong Unrestricted Liquidity We expect the system's financial position to remain strong given improved debt service coverage levels, unlimited rate setting authority and a strong unrestricted cash position. At the close of fiscal 2016, debt service coverage on the system's senior lien revenue debt was an improved 1.95 times compared to 1.50 in fiscal 2015. The improvement was driven largely by increased water usage and a material reduction in main breaks from a more moderate winter. Total debt service coverage, which includes the utility's senior lien revenue debt and certain general obligation (GO) debt paid for with water system net revenues was 1.69 times in fiscal 2016. Budgetary projections for fiscal 2017 reflect senior lien coverage of 1.56 times. LIQUIDITY The system's unrestricted cash totaled $8.5 million in fiscal 2016 or a strong 575 days of operations. The utility maintains an additional $3.1 million in other restricted cash and a debt service reserve cash funded at $1.9 million. The city has a formal policy of maintaining minimum reserve levels to cover 30% of annual operating revenues, a level it significantly exceeds. Debt and Legal Covenants: Modest Debt Ratio; Standard Legal Covenants We expect the system's debt ratio will remain modest based on limited future borrowing plans. Inclusive of the current refunding, the system's debt ratio is a modest 1.7 times system revenues. Future debt plans include approximately $700,000 in fiscal 2019. Legal provisions include a rate covenant of 1.10 times; an additional bonds test of 1.25 times of maximum annual debt service (MADS) on all senior lien revenue bonds; and a debt service reserve requirement equal to the lesser of 10% of principal on senior lien bonds, MADS on all outstanding parity bonds, or 125% of average annual debt service on outstanding bonds. DEBTSTRUCTURE All of the system's debt is fixed rate and long-term. After the current sale, the city will have $13.2 million in outstanding water revenue debt. As of fiscal 2016, the city has retired its outstanding GO debt that was supported by net revenues of the system. DEBT -RELATED DERIVATIVES The system is not a party to any derivative agreements. PENSIONS AND OPEB Pension costs associated with the employees of the system were $164,000 in fiscal 2016 or 2.0% of system operating revenues. For more information on the City of Iowa City's pension obligations, please see our most recent rating report on the city's GO rating. Management and Governance: Full Rate Setting Authority; Strong Financial Management The Iowa City Water System is an enterprise of the City of Iowa City. City Council has complete authority to set rates and charges. In fiscal years 2014 and 2015, City Council increased rates by 5% each year. Prior to the 2014, the most recent rate increase was implemented in 2000. While rates are not regularly adjusted, management closely monitors cash flows and reviews rate sufficiency on a regular basis. Management has consistently maintained stable debt service coverage and cash reserves that exceed the city's policy of 30% of average annual operating revenues. Legal Security Debt service on the system's revenue debt, including the Series 2017C Bonds, is secured by a senior lien on net revenues of the water utility. Use of Proceeds A portion of the proceeds from the current issuance will be used to refund certain maturities of the city's Series 2009B Bonds for an estimated net present value savings of 5.2%. Remaining proceeds will be used to fund a variety of system improvements. Obligor Profile The water system provides water treatment and distribution services for the City of Iowa City. As of fiscal 2016, the utility had approximately 25,200 accounts. Methodology The principal methodology used in this rating was US Municipal Utility Revenue Debt published in December 2014. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology. 26 April 2017 Iowa City Water Enterprise, IA. New Issue - Moody, Assigns Aa2 to Iowa City, IA's Water Revenue Bonds, Series 2017C MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE Ratings Exhibit 2 Iowa City (City of) IA Water Enterprise Issue Rating Water Revenue Capital Loan Bonds, Series 2017C Aa2 Rating Type Underlying IT Sale Amount 55,910,000 Expected Sale Date 05/02/2017 Rating Description Revenue: Gowmment Enterprise Source: Moody'slnvescorsSeMce 4 26 April 2017 Iowa City Water Enterprise, IA. New Issue - Moody's Assigns Aa2 to Iowa City, IA's Water Revenue Bonds, Series 2017C MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE W 2017 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively,'MOODY'S"). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. 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REPORT NUMBER 1068775 MOODY'S INVESTORS SERVICE 5 26 April 2017 Iowa City Water Enterprise, IA New Issue - Moody's Assigns A112 to Iowa City, IA's Water Revenue Bonds, Series 20170 Affordable Housing Is Too Expensive - CityLab From City Manager Why Is Affordable Housing So Expensive? Page 1 of 4 IP12 Limited city budgets and rising building costs create a recipe for disaster. JOE CORTRIGHT I Apr 20, 2017 111111133 Comments Friday, June 17, 2016. (Matt Rourke/AP) Love CityLab? Make sure you're signed up Email for our free a -mail newsletter. In many cities, affordable housing has a problem: it's not affordable. California Governor Jerry Brown made that point again, emphatically, with his new state https://www.citylab.comlhousingl2017/04/why-is-affordable-housing-so-expensive/52370... 4/21/2017 Affordable Housing Is Too Expensive - CityLab Page 2 of 4 budget. He's said that won't put any new state resources into subsidizing affordable housing until state and local governments figure out ways to bring the costs down. Last year, opposition from labor and environmental groups blocked the governor's proposal to exempt affordable housing from some key regulatory requirements. Brown had offered $400 million in additional state funds for affordable housing if that proposal was adopted. Now that money is off the table, as Brown said in his budget speech: "We've got to bring down the cost structure of housing and not just find ways to subsidize it." But the costs are substantial. In San Francisco, one of the largest all -affordable housing projects, 1950 Mission Street, clocks in at more than $600,000 per unit. That number isn't getting any lower: new units in that city's Candlestick Point development will cost nearly $825,000 each, according to recent press reports. Brown's point is that, at that cost per unit, it is simply beyond the fiscal reach of California to afford to build housing for all of the rent -burdened households. While the problem is extreme in San Francisco, it crops up elsewhere, too. In St. Paul, Minnesota, affordable housing, mostly one -bedroom units, in a renovated downtown building costs $665,000 per unit. In Portland, Oregon, newly elected Mayor Ted Wheeler has temporarily embargoed any further spending of the city's recently improved $258 million affordable housing bond issue. Shortly before he took office, the Portland Housing Bureau committed to spending nearly 15 percent of the levy's proceeds to acquire an existing 763 -unit housing complex. The city will pay $51 million in total, about $193,000 per unit for the building. The cost of new construction tends to be even higher. Public projects often involve more elaborate design, LEED certification, additional public spaces and higher overhead costs. CityObservatory Too Soon to Write Off City Revival More broadly, the case has been made that much publicly subsidized affordable housing costs significantly more to build than market -rate housing. Private developers are able to build new multi- https://www.citylab.comlhousingl2017/04/why-is-affordable-housing-so-expensive/52370... 4/21/2017 Affordable Housing Is Too Expensive - CityLab Page 3 of 4 Has Portland's Rent Fever family housing at far lower costs. One local Broken? builder has constructed new one -bedroom Why Might Uber and Lyft apartments in Portland at a cost of Less Support Road -Pricing? than 8100 000 a unit, albeit with fewer amenities and in less central locations that most publicly supported projects. In Portland, local private developer Rob Justus has proposed to build 300 apartments and sell them to the city for $100,000 each on a turn -key basis to be operated as affordable housing. Another possible cost -savings measure: off- site construction. The University of California Berkeley's Terner Center has a new report that explores the possibility for pre -fabricated, off-site construction to reduce construction costs. Wheeler voices the same concerns as Governor Brown: We've added a lot of programs to affordable housing that may be socially desirable. But when the goal is to create the maximum number of new doors, we have to reduce costs and get more supply on the market as quickly as possible. In the Twin Cities, Myron Orfield has pointed out that the allocation of tax credits and the concentration of community development corporations in urban neighborhoods has tended to produce more housing in costly urban Locations. Orfield also blames the high overhead costs of CDCs. Central city development programs are inefficient, spending much more per unit of new affordable housing in the central cities than comparable housing costs in more affluent, opportunity -rich suburbs. Many of the leading developers working in the poorest parts of the region also pay their managers very high salaries. As a https://www.citylab.comlhousingl2017/04/why-is-affordable-housing-so-expensive/52370... 4/21/2017 Affordable Housing Is Too Expensive - CityLab result, the funding system incentivizes higher cost projects in segregated neighborhoods over lower cost projects in integrated neighborhoods. Page 4 of 4 Perhaps the central problem of housing affordability is one of scale—the number of units that we're able to provide is too small. That's true whether we're talking about through Section 8 vouchers (that go to only about 1 in 5 eligible households), or through inclusionary zoning requirements (which provide only handfuls of units in most cities). The very high per-unit construction costs of affordable housing only make the problem more vexing: the pressure to make any project that gets constructed as distinctive, amenity -rich and environmentally friendly as possible, means that the limited number of public dollars end up building fewer units. And too few units—scale—is the real problem here. The combination of very limited public funds for affordable housing, even in the most prosperous and liberal cities, and the tendency for publicly subsidized housing to be nearly as costly as new, market rate housing, is a recipe for failure. This article originally appeared on 0tvObservatorr. About the Author Joe Cortright is the director of City Observatory. ALL POSTS I 1 Feed https://www.citylab.comlhousingl2017/04/why-is-affordable-housing-so-expensive/52370... 4/21/2017 IOWA CITY I CORALVILLE I NORTH LIBERTY I UNIVERSITY HEIGHTS Tuesday, May 2 Eastside Bike Night Family Ride Court Hill Park, IC 6:30-7:30 pm Start off the month with the first of weekly family rides. Friday, May 5 Fix A Flat Lunchtime Learning Johnson County Administration Building 913 S. Dubuque St., IC I Noon -1 pm Saturday, May 6 Move Naturally to the Market Iowa City Farmers Market Chauncey Swan Ramp 7:30-11:30 am Bike or walk and receive $2 voucher. South District Tour Johnson County Admin Building I 10am-noon Get to know south Iowa City; stops along the way include Terry Trueblood Recreation Center, Sycamore Greenway, Alexander School area, Grant Wood School, and Whispering Prairie Wetlands Park. Tuesday, May 9 Women -Trans -Femme Night Iowa City Bike Library 700 S. Dubuque St. 6-8 pm Bicycle -repair education and shop time for women -identified and gender -nonconforming people. Thursday, May 11 How to be a Bike Commuter NL Community Library 520 W. Cherry St., NL 16-7:30 pm Jon Yetley of Sugar Bottom Bikes teaches you everything you need to know to bike commute, including quick repairs and maintenance. Legal Cycling with Lawyer Jim Iowa City Public Library, Room A 17-8:30 pm Bike Law's Jim Freeman discusses bicycle safety, laws affecting cyclists, dangerous situations, interactions with law enforcement, your legal rights, and legislation affecting bicyclists. He can also speak about bicycle legislation in the 2017 session. Saturday, May 13 Move Naturally to the Market Iowa City Farmers Market Chauncey Swan Ramp 7:30-11:30 am Bike or walk and receive $2 voucher. Monday, May 15 Breakfast of Champions 30th Century Bike, 310 E. Prentiss St., IC 17-9 am Sugar Bottom Bikes, 325 N. Dubuque St., NL 17-9 am IC and NL bicyclists kick off the traditional start to Bike To Work Week with breakfast at their LBS. Monday, May 15 (continued) Car -Bus -Bike Race Start at Coralville Public Library 14015th St. I 11 am Elected county officials travel by car, bus, and bike along a common commuter route between the Coralville and Iowa City Public Libraries. Join the ride or greet them at the finish. Ladies Bike Night Geoff's Bike & Ski, 816 S. Gilbert St., IC 5:45-7 pm Iowa City Women's Cycling hosts a ladies only group ride followed by drinks and snacks at Bread Garden. Group A for first -timers will ride 10-15 mph for 1-1.5 hours. Group B, for more experienced cyclists, will ride 15-20 mph for 1-1.5 hours. Rain Date is Monday, May 22. Tuesday, May 16 County Cyclist Breakfast Johnson County Administration Building 7-9 am Greet the day, courtesy of Johnson County. And while you're there, be sure to congratulate county staff for its Gold status as a League of American Bicyclists Bike Friendly Business. Wednesday, May 17 New Pi Co-op to Co-op Bike Ride **NEW start" College Green Park, College and Washington Sts. 15:30 pm Traditional mid -month ride where cyclists travel together from College Green Park (note **NEW* location) to enjoy food, beverage, music and fun at the Coralville store. Thursday, May 18 Raindate for New Pioneer Co-op ride (see May 17) TV Under the stars North Liberty Community Center 520 W. Cherry St. 6-10 pm Another Episode: a binge -watching series presented by Collins Community Credit Union. Watch the first season of NBC's hit show"Parks and Recreation" under the stars. Friday, May 19 Commuter Breakfast World of Bikes, 723 S. Gilbert St. 17:30-9 am Come enjoy WOB's world famous breakfast sandwiches, hash browns, fruit, coffee and juice served up by the smiling crew. How Cycling Spun a Failed Industrial Town Into Economic Gold Coralville City Hall, 1512 7th St. I loam -Noon Aaron Hautala, of Cuyuna, Minn., share Secrets of Cuyuna as a mountain biking destination that brings in an estimated $21 million annually to the community. Saturday, May 20 Move Naturally to the Market Iowa City Farmers Market Chauncey Swan Ramp 7:30-11:30 am Bike or walk and receive $2 voucher. Rubbish Relief Ride Scott Park, IC 1 1:30-3:30 pm Family bike ride of about 1 mile to pick up trash on the trail from Scott Park to HyVee. End with an ice cream reward at Heyn's ice cream. A casual ride, may stop for fun. Bikes and Brews Reds Alehouse, North Liberty 19 am -5 pm Boulevard Brewing's 5th Annual Bikes and Brews starts at Reds Alehouse, with registration from 8-9 am. Stops along route in Coralville and Iowa City, returning to Reds after party for prizes. Sunday, May 21 May the Bike Bring You to the Market North Liberty Farmer's Market, Penn Landing 11 am -2 pm Leave your car at home and bike or walk for a $2 voucher to spend at the market. The Great Broken Spoke Treasure Hunt The Broken Spoke 757 S. Gilbert St., IC 1 11 am -5 am Test out your treasure -hunting skills on family - friendly routes in Iowa City, Coralville, and North Liberty. Bring non-perishable food and personal hygiene items to donate to Johnson County Crisis Center. Monday, May 22 Rain Date for Ladies Ride (See May 15) Tuesday, May 23 U Heights-Geoff's Bike and Ski Breakfast **NEW** location: University Heights Community Center, 1302 Melrose Ave. (corner of Sunset and Melrose) 16:30-9 am Tasty treats are back for another year to celebrate cycling in U Heights and west Iowa City. Women -Trans -Femme Night Iowa City Bike Library, 700 S. Dubuque St. 6-8 pm Bicycle -repair education and shop time for women -identified and gender -nonconforming people. Thursday, May 25 Writers and Riders: Slow Roll University Heights and Iowa City Start Happy Hollow Park, IC 16-9pm Neighboring towns join forces to offer Johnson County's first Slow Roll. "Writers and Riders"tours notable writerly sites in both towns. Finish at the University Heights Community Center, 1302 Melrose Ave., where riders will be able order Maggie's Farm Pizza and watch a documentary of long-time resident Dottie Ray. Saturday, May 27 Move Naturally to the Market Iowa City Farmers Market Chauncey Swan Ramp 17:30-11:30 am Bike or walk and receive $2 voucher. Wednesday, May 31 Just the Start Bike Month Party Big Grove Brewery and Taproom 1225 S. Gilbert St., IC I 5-7pm Salute the end of Bike Month and plan future fun at the lust the Start Bike Month Party at our newest brewery. For times, locations, and more information, visit thinkbicycles.org or"Bike Month 2017 in Johnson County"on Facebook. joint Meeting Johnson County Board of Supervisors - Iowa City Community School District - City of Iowa City - City of Coralville - City of North Liberty - Other Johnson County Municipalities and School Districts Monday, April 17 Minutes Call to order Mayor Terry Donahue called the Joint Meeting of Johnson County entities to order at 4:31 p.m. Elected officials present: Johnson County Board of Supervisors - Rod Sullivan, Lisa Green -Douglass, Kurt Friese, Janelle Rettig and Mike Carberry; City of Swisher - Chris Taylor; City of Iowa City - Pauline Taylor, Jim Throgmorton, John Thomas and Kingsley Botchway; City of North Liberty - Terry Donahue and Brian Wayson; Iowa City Community School District - Phil Hemingway, Brian Kirschling and Chris Lynch; City of Coralville - Jill Dodds, John Lundell and Laurie Goodrich; City of Tiffin - Steve Berner; and City of Hills - Tim Kemp. ICCSD Facilities Master Plan Chris Lynch, ICCSD School Board Chair, presented regarding the Facilities Master Plan. Highlights include the opening of four schools in the Fall and that projects are coming in on schedule and under budget. ICCSD GO Bond Board Chair Lynch presented information on the Bond Vote that will be held on September 12, 2017. The District has a web page relating to the bond issuance. The bond has been planned since 2013. The projected tax impact with reductions due to bonds being retired is projected to be $0.98/$1,000 with the cost coming back to even with valuation growth in 15 years. The group discussed the bond issue. Minimum Wage Jim Throgmorton, Iowa City Mayor, presented a proclamation regarding the minimum wage. The proclamation encourages businesses to maintain the $10.10 wage. It will be proclaimed at the April 18 formal meeting. The group discussed the minimum wage. Supervisor Janelle Rettig reported that the County assessed their legal options on the State's recent law changes. The County will continue to maintain the Minimum Wage Committee. The Committee will be reporting out updates in summer and will continue to produce cost of living adjustment updates. Update on programming and facilities for Crisis Intervention (CIT) Supervisor Green - Douglass reported on the status of the CIT program. Building options are being reviewed. The committee is attending a variety of City Council meetings requesting appointments to the steering committee and funding for the program. The facility will include a low barrier shelter, sober living facility, detox facility and a crisis stabilization facility. Supervisor Rettig reported that a local training was held two weeks ago. Approximately 65 law enforcement officers have been trained in the model. A governance committee will be created. The current steering committee has identified how many staff and how much space is necessary to start the project. The group discussed the project. Local impact of bills passed during the 2017 Legislative Session Supervisor Rettig requested feedback from the group regarding this current session. The County estimates the cost of the new voter registration law to be $100,000 in the first year for technology, education and outreach. The entities discussed the impacts to their funding and programs. The impact of constituent feedback was demonstrated through the funding of the Iowa Flood Center. The mixing of school and city elections was discussed. General entity updates City Administrator Ryan Heiar reported that North Liberty is updating Penn Street, North Liberty Road, and storm water utility rates. The Council and Mayoral election is on April 25 with seven Council candidates and three Mayoral candidates. Mayor Throgmorton reported that Iowa City has reopened the City Clerk search. Construction season is underway continuing with the Gateway Project. At the April 18 work session, Chief Matherly will present a proposal to reduce disproportionate minority contact. Councilor Botchway reported that the details are in the Council packet. Mayor Lundell reported that Coralville is undergrounding utilities for future road projects on 15C Avenue and Coralridge Avenue. County Supervisor Chair Rettig reported that the Johnson County Attorney is looking at moving the office to free up more courtroom space. The County has a Disproportionate Minority Contact study. The new ambulance/medical examiner building is opening next month. Ely Road and IWV will be under construction. The bike trail along Mehaffey Bridge Road and between Ely and Solon will be constructed. The County added another $600,000 to affordable housing for the Housing Trust Fund of Johnson County. Rettig reported that Andy Johnson is leaving the County at the end of the month. Mike Hensch who is currently the Medical Examiner Administrator will be taking over the position on May 3. Mayor Berner reported that Tiffin is constructing the roundabout on Highway 6 and Park Road. The sewer treatment expansion is underway that will allow for population growth to 9,500. Tiffin will be opening about 160 acres to mixed development, but primarily commercial development. Supervisor Carberry asked about tree removal along 1380. The group indicated it was trees removed for the 1380 improvement project that have to happen before April 1 due to the Indiana bat. Next meeting date and time Johnson County volunteered to host the next meeting on Monday, July 17 after the Community ID celebration. Social will begin at 4, meeting at 4:30 p.m. Public comment No public comment was offered. Adjournment Mayor Donahue adjourned the meeting at 5:33 p.m. � r CITY OF IOWA CITY 410 East Washington Street Iowa City, Iowa 52240-1826 (319(356-5000 (319(356-5009 FAX www.icgov.org LATE HANDOUTS: Information submitted between distribution of packet on Thursday and close of business on Monday. ITEM 3 — PROCLAMATIONS Item 3b Mildred-Pelzer Mural Appreciation Year CONSENT CALENDAR ITEM 5f Correspondence ITEM 5f(g) Tom Hertz: Farmers Market Plastic Bag Ban [Staff response included] REGULAR AGENDA ITEM 7a Rezoning Lehman Avenue — See correspondence ITEM 22 Augusta Place (Property North of City Hall) — See revised development agreement 7CO PACKET of 4/27 of email to Mayor from U.S. Conference of Mayors: Justice and pliance Definition of "Sanctuary City" to Mayors =,r To The Mayor: April 26, 2017 - Outlook Web App, light version https:Hwebmail.iowa-city.org/owa/?ae=Item&t=IPM.Note&id=R .. Late Handouts Distfibute� Outlook Web App Type hereto search Entire MailboxEOJ W a options 9 !VV %`j —7 t Reply L4 Reply All Forward In I X Junk clo ate + To The Mayor: April 26, 2017 Tom Cochran [tcochran@usmayors.org] To help protect your privacy, some content in this message has been blocked. If you're sure this message is from a trusted sender and you want to re -enable the blocked features, click here. You forwarded this message on 4/30/2017 3:21 PM. Sent: Wednesday, April 26, 2017 4:38 PM To: Jim Throgmorton Department of Justice and ICE Narrow Compliance Definition of View this em "Sanctuary City" to Mayors. April 26, 2017 Washington, D.C. Justice and ICE Narrow Compliance Definition of "Sanctuary City" to Mayors In meetings this Monday, with the Director of ICE and staff, and on Tuesday, with the Attorney General and staff, mayors left the meetings with a narrower definition of what is needed to be in compliance or noncompliance with federal laws relating to the executive order threatening to withhold federal funds authorized and appropriated by Congress. Seeking clarity, our delegation of mayors and police officials were referred to a brief filed last week by the Trump administration which indicates that the only law the Trump administration is seeking to enforce compliance with is 8 U.S. 1373, the provision that prohibits localities from issuing policies that preclude local police from communicating with federal immigration. Following that definition, New Orleans Mayor Landrieu, Vice President of the Conference said, 1 of 6 5/1/17, 9:30 AM To The Mayor: April 26, 2017 - Outlook Web App, light version https://webmail.iowa-city.org/owa/?ae=Item&t=IPM.Note&id=Rg... "based on what we've heard, I don't know of any cities that are out of compliance with that at the moment." Other mayors at the press conference in front of the Justice Department building echoed Mayor Landrieu's opinion. The other component of the compliance issue is the detainer issue. "Non-compliance with the voluntary program with warrantless detainers is not a violation." Representing the Major Cities Chiefs Association, Montgomery County, Maryland Police Chief Tom Manger raised the question of detainers and insisted that the authority to hold detainers, "is not a political decision, this is a legal decision." Providence Mayor Jorge Elorza said, "What's frustrating to us is we hear very different messages from DHS, DOJ, and also from the White House... please, amongst yourselves just have clear policy, one clear message so we know where we stand and where we don't stand." Attorney General Sessions issued a statement after our meeting that seemed to acknowledge that the federal government does have limited powers to force cities and counties to cooperate with ICE agents, but he encourages local governments to do so. From Attorney General Sessions' Statement: "We are pleased that the mayors who met with us today assured us they want to be in compliance with the law. The vast majority of state and local jurisdictions are in compliance and want to work with federal law enforcement to keep their communities safe. Of course, compliance with 8 U.S.C. 1373 is the minimum the American people should expect. We want all jurisdictions to enthusiastically support 2 of 6 5/1/17, 9:30 AM To The Mayor: April 26, 2017 - Outlook Web App, light version https:Hwebmail.iowa-city.org/owa/?ae=Item&t=IPM.Note&id=Rg... the laws of the United States that require the removal of criminal aliens, as many jurisdictions already do." One or two press reports of the Sessions meeting were entirely off the point and don't reflect the tone of the Sessions meeting. One report lead with "Democratic Mayors Unload on Sessions", which was erroneous reporting. The atmosphere of the meeting was straightforward, aggressive, questioning of the policy which mayors were seeking clarity on. And while no Republican mayors were at the Sessions meeting, Republican Past President Elizabeth Kautz was present at the meeting with the ICE Director and staff the day before. Further, questions of policy asked by our bipartisan elected Vice Presidents Landrieu and Benjamin were all questions based on the bipartisan policy voted upon by Democratic, Republican, and Independent mayors at our business sessions where policy is voted on by mayors. Federal District Judge Blocks Order to Withhold Federal Funds from Cities and Counties On the same day, we felt like we were getting better clarity on the conflicting immigration directives of the Trump administration, then late in the afternoon came a U.S. District Judge temporarily blocking the administration from withholding federal funds from cities and counties. Judge Orrick stated in his ruling that, "Federal funding that bears no meaningful relationship to immigration enforcement cannot be threatened merely because a jurisdiction chooses an immigration enforcement strategy of which the President disapproves." The judge also backed up his ruling relative to the scope of the executive order based on public comments by attorney General Sessions and 3 of 6 5/1/17, 9:30 AM To The Mayor: April 26, 2017 - Outlook Web App, light version President Trump. https://webmaii.iowa-city.org/owa/?ae=Item&t=IPMNote&id=Rg... San Francisco stood to lose more than $1 billion and Santa Clara County $1.7 billion threatened with the Trump order. This judge is saying Congress awarded the money to these jurisdictions and they can't - as Attorney General Sessions announced at a recent White House press briefing - "claw" it back. There is still the question of whether the withdrawal might relate to law enforcement grants. The ruling yesterday relates to billions the Congress has approved and distributed under its constitutional and statutorial authorities to the City and County of San Francisco and the County of Santa Clara. This is a temporary order and President Trump has already tweeted. The administration will appeal all the way to the Supreme Court. Countdown to Shutdown Looks Unlikely - GOP Leaders - No New Money for the Wall - NOW The threat of a government shutdown this week over the question of the $1.5 billion Trump request to build the wall between the U.S. and Mexico is alleviated by the Republican leaders offering a deal to Democrats with no new money for the wall. The White House, to avert a shutdown, agrees with the agreement, but assured all that President Trump is more defiant than ever with his statement that no matter what happens to the current spending bill, "The wall's going to be built." 4 of 6 5/l/17,9:30 AM To The Mayor: April 26, 2017 - Outlook Web App, light version https://webmail.iowa-city.org/owa/?ae=Item&t=IPM.Note&id=Rg... Here's a Fact. According to various sources, the Trump Wall will be 18 feet tall, it will take at least an hour to make a hole in the wall caused by, hammer, chisel, or battery operated device, and it will be built to extend no less than six feet underground to prevent anyone from tunneling underneath. Estimates of cost range from $8 billion to $40 billion: . President Trump $8 billion to $12 billion . Republican Leadership $12 billion to $15 billion . Rosenblum Institute and Bernstein Research $15 billion to $18 billion . Konstantin Kakes, New America Foundation $27 billion to $40 billion The U.S./Mexico border is 2,000 miles long, two thirds of which track the Rio Grande River. One last note, The Great Wall of China is today 13,171 miles long. Tom @tcochran mayors Copyright © 2017 The United States Conference of Mayors, All rights reserved. To change your contact information, please visit https://community.usmayors.org/. 5 of 6 5/1/17, 9:30 AM To The Mayor: April 26, 2017 - Outlook Web App, light version https://webmaii.iowacity.org/owa/?ae=Item&t=IPM.Note&id=Rg... Our mailing address is: The United States Conference of Mayors 1620 1 St., N.W. 4th Floor Washington, DC 20006 Add us to your address book Want to change how you receive these emails? You can update your contact information, update your preferences or unsubscribe from this list Corns to Mivasdt Ettltarge 6 of 6 5/l/17,9:30 AM DRAFT IP15 COMMUNITY POLICE REVIEW BOARD COMMUNITY FORUM April 12, 2016, 6:00 P.M. IOWA CITY PUBLIC LIBRARY 123 South Linn Street, IC CALL TO ORDER: Chair Joseph Treloar called the meeting to order at 6:00 P.M. MEMBERS PRESENT: Orville Townsend, Mazahir Salih, Monique Green, Donald King MEMBERS ABSENT: None STAFF PRESENT: Legal Counsel Patrick Ford and Staff Kellie Fruehling (Transcriptions are available) INTRODUCTION OF THE BOARD CONSIDER MOTION TO ACCEPT CORRESPONDENCE AND/OR DOCUMENTS Treloar read the correspondence received into the record. Motion by King, seconded by Green to accept correspondence and/or documents. Motion carried, 5/0. MEET THE NEW POLICE CHIEF, JODY MATHERLY Chief Matherly gave some background information about himself personally and professionally. He also spoke about the department, other City departments, and the community working together. The Chief feels that the CPRB is a positive thing for the community. He also reported on number of officers, average calls for service and number of arrests per year. PUBLIC DISCUSSION The following individuals appeared before the CPRB: Mary Gravitt Maria Conzemius Roger Goedken Harry Olmstead Jackie Reger ADJOURNMENT Meeting adjourned at 6:48 P.M. 2714 Wayne Ave #6, Iowa City 2833 Sterling Dr, Iowa City Lone Tree 1255 Shannon Dr, Iowa City 1215 Santa Fe Dr, Iowa City (Forum Summary will be submitted to Council) COMMUNITY POLICE REVIEW BOARD ATTENDANCE RECORD YEAR 2016-2017 (Meeting Date) KEY: X = TERM 4/26 5/18 5/23 6/7 8/17 9/13 10/11 11/7 11/15 12/15 1/10 2/14 3/14 4/12 NAME EXP. Joseph 7/1/17 X O/E X X X X X X X X X X X X Treloar Mazahir 7/1/17 X X O/E O/E X X O X O X X X O/E X Salih Donald 7/1/19 X X X X O/E X OX O/E O/E O/E O/E O/E X X King Monique 7/1/20 --- --- --- --- X X X X X X X X X X Green Orville 7/1/20 --- --- --- --- X X X X X X X X X X Townsend Melissa 9/1/16 X X X X --- --- --- --- --- --- --- --- --- --- Jensen Royceann 9/1/16 X X X O --- --- --- --- --- --- --- --- --- Porter KEY: X = Present O = Absent O/E = Absent/Excused NM = No meeting --- = Not a Member