HomeMy WebLinkAbout2025-11-17 I06 Bonds_$7M Water Revenue CLN_CIWW Asset Transfer_Approve Loan Agreement, TECAGENDA ITEM:
CITY OF WAUKEE, IOWA
CITY COUNCIL MEETING COMMUNICATION
MEETING DATE: November 17, 2025
AGENDA ITEM:Consideration of approval of a resolution approving and authorizing a
form of Loan and Disbursement Agreement by and between the City of
Waukee, Iowa, and the Iowa Finance Authority, and authorizing and
providing for the issuance and securing the payment of $7,000,000 Water
Revenue Capital Loan Notes, Series 2025, of the City of Waukee, Iowa,
under the provisions of the Code of Iowa, and providing for a method of
payment of said Notes and Approving form of Tax Exemption Certificate
FORMAT:Resolution
SYNOPSIS INCLUDING PRO & CON: The proposed capital loan note proceeds will be used
to provide funds to pay the costs of the Central Iowa Water Works
(CIWW) Transfer Purchase Payment (Buy In Fee).
FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS: $7,000,000
COMMISSION/BOARD/COMMITTEE COMMENT:
STAFF REVIEW AND COMMENT:
RECOMMENDATION: Approve the resolution.
ATTACHMENTS: I. Proposed Resolution
II. Tax Exemption Certificate
PREPARED BY:Becky Schuett
REVIEWED BY:
PUBLIC NOTICE INFORMATION –
NAME OF PUBLICATION:
DATE OF PUBLICATION:
I6
RESOLUTION NO. _______
A RESOLUTION APPROVING AND AUTHORIZING A FORM
OF LOAN AND DISBURSEMENT AGREEMENT BY AND
BETWEEN THE CITY OF WAUKEE AND THE IOWA
FINANCE AUTHORITY, AND AUTHORIZING AND
PROVIDING FOR THE ISSUANCE AND SECURING THE
PAYMENT OF $7,000,000 WATER REVENUE CAPITAL
LOAN NOTES, SERIES 2025, OF THE CITY OF WAUKEE,
IOWA, UNDER THE PROVISIONS OF THE CODE OF IOWA,
AND PROVIDING FOR A METHOD OF PAYMENT OF SAID
NOTES AND APPROVING THE FORM OF TAX EXEMPTION
CERTIFICATE
WHEREAS, the City Council of the City of Waukee, Iowa, sometimes hereinafter
referred to as the "Issuer", has heretofore established charges, rates and rentals for services which
are and will continue to be collected as system revenues of the Waukee Water System,
sometimes hereinafter referred to as the "System", and the Net Revenues are available for the
payment of Water Revenue Capital Loan Notes, Series 2025, subject to the following premises;
and
WHEREAS, Issuer proposes to issue its Water Revenue Capital Loan Notes,
Series 2025, to the extent of $7,000,000, for the purpose of defraying the costs of the Project as
set forth in Section 1 of this Resolution; and, it is deemed necessary and advisable and in the best
interests of the City that a form of Loan and Disbursement Agreement by and between the City
and the Iowa Finance Authority, be approved and authorized; and
WHEREAS, there have been heretofore issued certain water revenue bonds, notes, or
other obligations, part of which remain outstanding and are a lien on the Net Revenues of the
System (defined herein as the "Outstanding Obligations"); and
WHEREAS, in the Prior Note Resolutions it is provided that Additional Obligations may
be issued on a parity with the Outstanding Obligations, for the costs of future improvements and
extensions to the System, or refunding outstanding obligations, provided that there has been
procured and placed on file with the City Clerk, a statement complying with the conditions and
limitations therein imposed upon the issuance of Parity Obligations; and
WHEREAS, a statement of PFM Financial Advisors LLC, an independent municipal
advisor not in the regular employ of Issuer, has been placed on file in the office of the Clerk,
showing the conditions and limitations of the Prior Note Resolutions, with regard to the
sufficiency of the Net Revenues of the System to permit the issuance of Additional Obligations
ranking on a parity with the Outstanding Obligations to have been met and satisfied as required;
and
WHEREAS, the notice of intention of Issuer to take action for the issuance of not to
exceed $9,000,000 Water Revenue Capital Loan Notes, Series 2025, has heretofore been duly
published and no objections to such proposed action have been filed; and the Issuer desires to
proceed with the issuance of said Notes.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WAUKEE, STATE OF IOWA:
Section 1. Definitions. The following terms shall have the following meanings in this
Resolution unless the text expressly or by necessary implication requires otherwise:
♦ "Additional Obligations" shall mean any water revenue bonds or notes or
other obligations issued on a parity with the Notes in accordance with the provisions of
this Resolution.
♦ "Agreement" shall mean a Loan and Disbursement Agreement dated as of
the Closing between the City and the Original Purchaser, relating to the Loan made to the
City under the Program.
♦ "City Clerk" shall mean the City Clerk or such other officer of the
successor Governing Body as shall be charged with substantially the same duties and
responsibilities.
♦ "Closing" shall mean the date of delivery of the Note to the Original
Purchaser and the funding of the Loan.
♦ "Corporate Seal" shall mean the official seal of Issuer adopted by the
Governing Body.
♦ "Fiscal Year" shall mean the twelve month period beginning on July 1 of
each year and ending on the last day of June of the following year, or any other
consecutive twelve-month period adopted by the Governing Body or by law as the
official accounting period of the System. Requirements of a Fiscal Year as expressed in
this Resolution shall exclude any payment of principal or interest falling due on the first
day of the Fiscal Year and include any payment of principal or interest falling due on the
first day of the succeeding Fiscal Year, except to the extent of any conflict with the terms
of the Outstanding Obligations while the same remain outstanding.
♦ "Governing Body" shall mean the City Council of the City, or its
successor in function with respect to the operation and control of the System.
♦ "Independent Auditor" shall mean an independent firm of Certified Public
Accountants or the Auditor of State.
♦ "Issuer" and "City" shall mean the City of Waukee, Iowa.
♦ "Loan" shall mean the principal amount allocated by the Original
Purchaser to the City under the Program, equal in amount to the principal amount of the
Notes.
♦ "Net Revenues" shall mean gross earnings of the System after deduction
of current expenses; "Current Expenses" shall mean and include the reasonable and
necessary cost of operating, maintaining, repairing and insuring the 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 Notes and any Parity
Obligations or payments to the various funds established herein; capital costs,
depreciation and interest or principal payments are not System expenses.
♦ "Notes" or "Note" shall mean $7,000,000 Water Revenue Capital Loan
Notes, Series 2025, authorized to be issued by this Resolution.
♦ "Original Purchaser" shall mean the Iowa Finance Authority, as the
purchaser of the Notes from Issuer at the time of their original issuance.
♦ "Outstanding Obligations" shall mean the Water Revenue Bonds, Series
2015B dated July 21, 2015, Water Revenue Bonds, Series 2018B dated June 19, 2018,
and Water Revenue Bonds, Series 2019B dated August 21, 2019, of which obligations
are still outstanding and unpaid and remain a lien on the Net Revenues of the System.
♦ "Parity Obligations" shall mean water revenue notes, bonds or other
obligation payable solely from the Net Revenues of the System on an equal basis with the
Notes herein authorized to be issued and shall include Additional Obligations as
authorized to be issued under the terms of this Resolution and the Outstanding
Obligations.
♦ "Paying Agent" shall mean the City Clerk, or such successor as may be
approved by Issuer as provided herein and who shall carry out the duties prescribed
herein as Issuer's Agent to provide for the payment of principal of and interest on the
Notes as the same shall become due.
"Permitted Investments" shall mean any investments permitted in Iowa
Code chapter 12B or section 12C.9. All interim investments must mature before the date
on which the moneys are required for payment of principal and interest on the Notes or
project costs.
♦ "Prior Note Resolution(s)" shall mean resolutions adopted on July 6, 2015,
June 4, 2018 and August 5, 2019, authorizing the Outstanding Obligations.
♦ "Program" shall mean the Iowa Drinking Water Facilities Financing
Program undertaken by the Original Purchaser.
♦ "Project" shall mean the costs of acquisition, construction, reconstruction,
extending, remodeling, improving, repairing and equipping all or part of the Water
Utility, including those costs associated with the CIWW Asset Transfer project.
♦ "Project Fund" shall mean the Loan Account maintained under the
Program for the benefit of the Issuer into which the proceeds of the Loan and the Note
shall be allocated and held until disbursed to pay Project costs.
♦ "Rebate Fund" shall mean the fund so defined in and established pursuant
to the Tax Exemption Certificate.
♦ "Registrar" shall be the City Clerk, or such successor as may be approved
by Issuer as provided herein and who shall carry out the duties prescribed herein with
respect to maintaining a register of the owners of the Notes. Unless otherwise specified,
the Registrar shall also act as Transfer Agent for the Notes.
♦ "Reserve Fund Requirement" shall mean an amount equal to the lesser of
(a) the maximum annual amount of the principal and interest coming due on the Notes
and Parity Obligations requiring a reserve; (b) 10 % of the stated principal amount of the
Notes and Parity Obligations requiring a reserve or (c) 125% of the average annual
principal and interest coming due on the Notes and Parity Obligations requiring a reserve.
For purposes of this definition: (1) "issue price" shall be substituted for "stated principal
amount" for issues with original issue discount or original issue premium of more than a
de minimus amount and (2) stated principal amount shall not include any portion of an
issue refunded or advance refunded by a subsequent issue.
♦ "Resolution" shall mean this resolution authorizing the issuance of the
Bonds.
♦ "System" shall mean the Waukee Water Utility of the Issuer and all
properties of every nature hereinafter owned by the Issuer comprising part of or used as a
part of the System, including all improvements and extensions made by Issuer while any
of the Notes or Parity Obligations remain outstanding; all real and personal property; and
all appurtenances, contracts, leases, franchises and other intangibles.
♦ "Tax Exemption Certificate" shall mean the Tax Exemption Certificate
executed by the Finance Director and delivered at the time of issuance and delivery of the
Notes.
♦ "Treasurer" shall mean the Finance Director or such other officer as shall
succeed to the same duties and responsibilities with respect to the recording and payment
of the Notes issued hereunder.
♦ "Yield Restricted" shall mean required to be invested at a yield that is not
materially higher than the yield on the Notes under Section 148(a) of the Internal
Revenue Code or regulations issued thereunder.
Section 2. Authority. The Agreement and the Notes authorized by this Resolution shall
be issued pursuant to Sections 384.24A and 384.83 of the Code of Iowa, and in compliance with
all applicable provisions of the Constitution and laws of the State of Iowa. The Agreement shall
be substantially in the form attached to this Resolution and is authorized to be executed and
issued on behalf of the Issuer by the Mayor and attested by the City Clerk.
Section 3. Authorization and Purpose. There are hereby authorized to be issued,
negotiable, serial, fully registered Revenue Notes of the City of Waukee, in the County of Dallas,
Iowa, each to be designated as "Water Revenue Capital Loan Note, Series 2025", in the
aggregate amount of $7,000,000, for the purpose of paying costs of the Project. The City
Council, pursuant to Sections 384.24A and 384.83 of the Code of Iowa, hereby finds and
determines that it is necessary and advisable to issue said Notes authorized by the Agreement
and this Resolution.
Section 4. Source of Payment. The Notes herein authorized and Parity Obligations and
the interest thereon shall be payable solely and only out of the Net Revenues of the System and
shall be a first lien on the future Net Revenues of the System. The Notes shall not be general
obligations of the Issuer nor shall they be payable in any manner by taxation and the Issuer shall
be in no manner liable by reason of the failure of the said Net Revenues to be sufficient for the
payment of the Notes.
Section 5. Note Details. Water Revenue Capital Loan Notes, Series 2025, of the City in
the amount of $7,000,000, shall be issued to evidence the obligations of the Issuer under the
Agreement pursuant to the provisions of Sections 384.24A and 384.83 of the Code of Iowa for
the aforesaid purpose. The Notes shall be designated "WATER REVENUE CAPITAL LOAN
NOTE, SERIES 2025", be dated the date of delivery, and bear interest at the rate of 3.01% per
annum from the date of each advancement made under the Agreement, until payment thereof, at
the office of the Paying Agent, said interest payable on June 1, 2026, and semi-annually
thereafter on the 1st day of June and December in each year until maturity as set forth on the
Debt Service Schedule attached to the Agreement as Exhibit A and incorporated herein by this
reference. As set forth on said Debt Service Schedule, principal shall be payable on June 1,
2026, and annually thereafter on the 1st day of June in the amounts set forth therein until
principal and interest are fully paid, except that the final installment of the entire balance of
principal and interest, if not sooner paid, shall become due and payable on June 1, 2045.
Notwithstanding the foregoing or any other provision hereof, principal and interest shall be
payable as shown on said Debt Service Schedule until completion of the Project, at which time
the final Debt Service Schedule shall be determined based upon actual advancements, final costs
and completion of the Project, all as provided in the administrative rules governing the Program.
Payment of principal and interest on the Notes shall at all times conform to said Debt Service
Schedule and the rules of the Program.
The Notes shall be executed by the manual or facsimile signature of the Mayor and
attested by the manual or facsimile signature of the City Clerk, and impressed or imprinted with
the seal of the City and shall be fully registered as to both principal and interest as provided in
this Resolution; principal, interest and premium, if any, shall be payable at the office of the
Paying Agent by mailing of a check, wire transfer or automated clearing house system transfer to
the registered owner of the Note. The Notes shall be in the denomination of $1,000 or multiples
thereof and may at the request of the Original Purchaser be initially issued as a single Note in the
denomination of $7,000,000 and numbered R-1.
Section 6. Initiation Fee and Servicing Fee. In addition to the payment of principal of
and interest on the Notes, the Issuer also agrees to pay the Initiation Fee and the Servicing Fee as
defined and in accordance with the terms of the Agreement.
Section 7. Redemption. The Notes are subject to optional redemption at a price of par
plus accrued interest (i) on any date upon receipt of written consent of the Original Purchaser or
(ii) in the event that all or substantially all of the Project is damaged or destroyed. Any optional
redemption of the Notes may be made from any funds regardless of source, in whole or from
time to time in part, in inverse order of maturity, by giving not less than thirty (30) days' written
notice of redemption to the Original Purchaser (or any other registered owner of the Note). The
terms of redemption shall be par, plus accrued interest to date of call. The Notes are also subject
to mandatory redemption as set forth in Section 5 of the Agreement.
Section 8. Registration of Notes; Appointment of Registrar; Transfer; Ownership;
Delivery; and Cancellation.
(a) Registration. The ownership of Notes may be transferred only by the
making of an entry upon the books kept for the registration and transfer of ownership of
the Notes, and in no other way. The City Clerk is hereby appointed as Note Registrar
under the terms of this Resolution. Registrar shall maintain the books of the Issuer for
the registration of ownership of the Notes for the payment of principal of and interest on
the Notes as provided in this Resolution. All Notes shall be negotiable as provided in
Article 8 of the Uniform Commercial Code subject to the provisions for registration and
transfer contained in the Notes and in this Resolution.
(b) Transfer. The ownership of any Note may be transferred only upon the
Registration Books kept for the registration and transfer of Notes and only upon
surrender thereof at the office of the Registrar together with an assignment duly executed
by the holder or his duly authorized attorney in fact in such form as shall be satisfactory
to the Registrar, along with the address and social security number or federal employer
identification number of such transferee (or, if registration is to be made in the name of
multiple individuals, of all such transferees). In the event that the address of the
registered owner of a Note (other than a registered owner which is the nominee of the
broker or dealer in question) is that of a broker or dealer, there must be disclosed on the
Registration Books the information pertaining to the registered owner required above.
Upon the transfer of any such Note, a new fully registered Note, of any denomination or
denominations permitted by this Resolution in aggregate principal amount equal to the
unmatured and unredeemed principal amount of such transferred fully registered Note,
and bearing interest at the same rate and maturing on the same date or dates shall be
delivered by the Registrar.
(c) Registration of Transferred Notes. In all cases of the transfer of the Notes,
the Registrar shall register, at the earliest practicable time, on the Registration Books, the
Notes, in accordance with the provisions of this Resolution.
(d) Ownership. As to any Note, the person in whose name the ownership of
the same shall be registered on the Registration Books of the Registrar shall be deemed
and regarded as the absolute owner thereof for all purposes, and payment of or on
account of the principal of any such Notes and the premium, if any, and interest thereon
shall be made only to or upon the order of the registered owner thereof or his legal
representative. All such payments shall be valid and effectual to satisfy and discharge the
liability upon such Note, including the interest thereon, to the extent of the sum or sums
so paid.
(e) Cancellation. All Notes which have been redeemed shall not be reissued
but shall be cancelled by the Registrar. All Notes which are cancelled by the Registrar
shall be destroyed and a Certificate of the destruction thereof shall be furnished promptly
to the Issuer; provided that if the Issuer shall so direct, the Registrar shall forward the
cancelled Notes to the Issuer.
(f) Non-Presentment of Notes. In the event any payment check representing
payment of principal of or interest on the Notes is returned to the Paying Agent or if any
note is not presented for payment of principal at the maturity or redemption date, if funds
sufficient to pay such principal of or interest on Notes shall have been made available to
the Paying Agent for the benefit of the owner thereof, all liability of the Issuer to the
owner thereof for such interest or payment of such Notes shall forthwith cease, terminate
and be completely discharged, and thereupon it shall be the duty of the Paying Agent to
hold such funds, without liability for interest thereon, for the benefit of the owner of such
Notes who shall thereafter be restricted exclusively to such funds for any claim of
whatever nature on his part under this Resolution or on, or with respect to, such interest
or Notes. The Paying Agent's obligation to hold such funds shall continue for a period
equal to two years and six months following the date on which such interest or principal
became due, whether at maturity, or at the date fixed for redemption thereof, or
otherwise, at which time the Paying Agent, shall surrender any remaining funds so held
to the Issuer, whereupon any claim under this Resolution by the Owners of such interest
or Notes of whatever nature shall be made upon the Issuer.
Section 9. Reissuance of Mutilated, Destroyed, Stolen or Lost Notes. In case any
outstanding Note shall become mutilated or be destroyed, stolen or lost, the Issuer shall at the
request of Registrar authenticate and deliver a new Note of like tenor and amount as the Note so
mutilated, destroyed, stolen or lost, in exchange and substitution for such mutilated Note to
Registrar, upon surrender of such mutilated Note, or in lieu of and substitution for the Note
destroyed, stolen or lost, upon filing with the Registrar evidence satisfactory to the Registrar and
Issuer that such Note has been destroyed, stolen or lost and proof of ownership thereof, and upon
furnishing the Registrar and Issuer with satisfactory indemnity and complying with such other
reasonable regulations as the Issuer or its agent may prescribe and paying such expenses as the
Issuer may incur in connection therewith.
Section 10. Record Date. Payments of principal and interest, otherwise than upon full
redemption, made in respect of any Note, shall be made to the registered holder thereof or to
their designated Agent as the same appear on the books of the Registrar on the 15th day of the
month preceding the payment date. All such payments shall fully discharge the obligations of
the Issuer in respect of such Notes to the extent of the payments so made. Upon receipt of the
final payment of principal, the holder of the Note shall surrender the Note to the Paying Agent.
Section 11. Execution, Authentication and Delivery of the Notes. Upon the adoption of
this Resolution, the Mayor and City Clerk shall execute the Notes by their manual or authorized
signature and deliver the Notes to the Registrar, who shall authenticate the Notes and deliver the
same to or upon order of the Original Purchaser. No Note shall be valid or obligatory for any
purpose or shall be entitled to any right or benefit hereunder unless the Registrar shall duly
endorse and execute on such Note a Certificate of Authentication substantially in the form of the
Certificate herein set forth. Such Certificate upon any Note executed on behalf of the Issuer
shall be conclusive evidence that the Note so authenticated has been duly issued under this
Resolution and that the holder thereof is entitled to the benefits of this Resolution.
Section 12. Right to Name Substitute Paying Agent or Registrar. Issuer reserves the
right to name a substitute, successor Registrar or Paying Agent upon giving prompt written
notice to each registered noteholder.
Section 13. Form of Note. Notes shall be printed in substantial compliance with
standards proposed by the American Standards Institute substantially in the form as follows:
"STATE OF IOWA"
"COUNTY OF DALLAS"
"CITY OF WAUKEE"
"WATER REVENUE CAPITAL LOAN NOTE"
"SERIES 2025"
Rate: 3.01%
Final Maturity: June 1, 2045
Note Date: December 19, 2025
CUSIP # N/A
"Registered"
Certificate No. R-1
Principal Amount: $7,000,000
The City of Waukee, Iowa, a municipal corporation organized and existing under and by
virtue of the Constitution and laws of the State of Iowa (the "Issuer"), for value received,
promises to pay from the source and as hereinafter provided, to
IOWA FINANCE AUTHORITY
or registered assigns, the principal sum of (principal amount written out) in lawful money of the
United States of America, on the maturity dates and in the principal amounts set forth on the
Debt Service Schedule attached hereto and incorporated herein by this reference, with interest on
said sum from the date of each advancement made under a certain Loan and Disbursement
Agreement dated as of the date hereof until paid at the rate of 3.01% per annum, payable on June
1, 2026, and semi-annually thereafter on the 1st day of June and December in each year. As set
forth on said Debt Service Schedule, principal shall be payable on June 1, 2026, and annually
thereafter on the first day of June in the amounts set forth therein until principal and interest are
fully paid, except that the final installment of the entire balance of principal and interest, if not
sooner paid, shall become due and payable on June 1, 2045. Notwithstanding the foregoing or
any other provision hereof, principal and interest shall be payable as shown on said Debt Service
Schedule until completion of the Project, at which time the final Debt Service Schedule shall be
determined and attached hereto based upon actual advancements, final costs and completion of
the Project, all as provided in the administrative rules governing the Iowa Drinking Water
Facilities Financing Program. Payment of principal and interest of this Note shall at all times
conform to said Debt Service Schedule and the rules of the Drinking Water State Revolving
Fund Program.
Interest and principal shall be paid to the registered holder of the Note as shown on the
records of ownership maintained by the Registrar as of the 15th day of the month next preceding
such interest payment date. Interest shall be computed on the basis of a 360-day year of twelve
30-day months.
This Note is issued pursuant to the provisions of Sections 384.24A and 384.83 of the
Code of Iowa, for the purpose of paying costs of acquisition, construction, reconstruction,
extending, remodeling, improving, repairing and equipping all or part of the Water Utility,
including those costs associated with the CIWW Asset Transfer project, and evidences amounts
payable under a certain Loan and Disbursement Agreement dated as of the date hereof, in
conformity to a Resolution of the City Council of the City duly passed and approved. For a
complete statement of the revenues and funds from which and the conditions under which this
Note is payable, a statement of the conditions under which additional notes or bonds of equal
standing may be issued, and the general covenants and provisions pursuant to which this Note is
issued, reference is made to the above-described Loan and Disbursement Agreement and
Resolution.
This Note is subject to optional redemption at a price of par plus accrued interest (i) on
any date upon receipt of written consent of the Iowa Finance Authority or (ii) in the event that all
or substantially all of the Project is damaged or destroyed. Any optional redemption of this Note
may be made from any funds regardless of source, in whole or from time to time in part, in
inverse order of maturity, by lot by giving thirty (30) days' written notice of redemption, to the
Iowa Finance Authority (or any other registered owner of the Note). This Note is also subject to
mandatory redemption as set forth in Section 5 of the Agreement.
Ownership of this Note may be transferred only by transfer upon the books kept for such
purpose by the City Clerk, the Registrar. Such transfer on the books shall occur only upon
presentation and surrender of this Note at the office of the Registrar, together with an assignment
duly executed by the owner hereof or his duly authorized attorney in the form as shall be
satisfactory to the Registrar. Issuer reserves the right to substitute the Registrar and Paying
Agent but shall, however, promptly give notice to registered Noteholders of such change. All
Notes shall be negotiable as provided in Article 8 of the Uniform Commercial Code and subject
to the provisions for registration and transfer contained in the Note Resolution.
This Note and the series of which it forms a part, other obligations ranking on a parity
therewith, and any Additional Obligations which may be hereafter issued and outstanding from
time to time on a parity with said Notes, as provided in the Resolution and Loan and
Disbursement Agreement of which notice is hereby given and which are hereby made a part
hereof, are payable from and secured by a pledge of the Net Revenues of the Waukee Water
Utility (the "System"), as defined and provided in said Resolution. There has heretofore been
established and the City covenants and agrees that it will maintain just and equitable rates or
charges for the use of and service rendered by said System in each year for the payment of the
proper and reasonable expenses of operation and maintenance of said System and for the
establishment of a sufficient sinking fund to meet the principal of and interest on this series of
Notes, and other obligations ranking on a parity therewith, as the same become due. This Note is
not payable in any manner by taxation and under no circumstances shall the City be in any
manner liable by reason of the failure of said Net Revenues to be sufficient for the payment
hereof.
And it is hereby represented and certified that all acts, conditions and things requisite,
according to the laws and Constitution of the State of Iowa, to exist, to be had, to be done, or to
be performed precedent to the lawful issue of this Note, have been existent, had, done and
performed as required by law.
IN TESTIMONY WHEREOF, said City by its City Council has caused this Note to be
signed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile
signature of its City Clerk, with the seal of said City impressed hereon, and authenticated by the
Registrar, the City Clerk of the City of Waukee, Iowa, all as of the 19th day of December, 2025.
Date of authentication:December 19, 2025
This is one of the Notes described in the within mentioned Resolution,
as registered by the City Clerk.
CITY CLERK, WAUKEE, IOWA
By: ______________________________________________
Registrar
Registrar and Transfer Agent:City Clerk
Paying Agent: City Clerk
SEE REVERSE FOR CERTAIN DEFINITIONS
(Seal)
(Signature Block)
CITY OF WAUKEE, STATE OF IOWA
By: (manual or facsimile signature)
Mayor
ATTEST:
By: (manual or facsimile signature)
City Clerk
[Assignment Block]
[Information Required for Registration]
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
_________________________ (Social Security or Tax Identification No. _______________) the
within Note and does hereby irrevocably constitute and appoint _________________________
attorney in fact to transfer the said Note on the books kept for registration of the within Note,
with full power of substitution in the premises.
Dated: __________________________________________________
__________________________________________________
__________________________________________________
(Person(s) executing this Assignment sign(s) here)
SIGNATURE )
GUARANTEED )__________________________________________________
IMPORTANT - READ CAREFULLY
The signature(s) to this Power must correspond with the name(s) as written upon the face
of the Certificate(s) or Note(s) in every particular without alteration or enlargement or
any change whatever. Signature guarantee must be provided in accordance with the
prevailing standards and procedures of the Registrar and Transfer Agent. Such standards
and procedures may require signature to be guaranteed by certain eligible guarantor
institutions that participate in a recognized signature guarantee program.
INFORMATION REQUIRED FOR REGISTRATION OF TRANSFER
Name of Transferee(s)
Address of Transferee(s)
Social Security or Tax Identification
Number of Transferee(s)
Transferee is a(n):
Individual*Corporation
Partnership Trust
*If the Note is to be registered in the names of multiple individual owners, the names of all such
owners and one address and social security number must be provided.
The following abbreviations, when used in the inscription on the face of this Note, shall
be construed as though written out in full according to applicable laws or regulations:
TEN COM -as tenants in common
TEN ENT -as tenants by the entireties
JT TEN -as joint tenants with rights of survivorship and not as tenants in common
IA UNIF TRANS MIN ACT - .......... Custodian ..........
(Cust) (Minor)
Under Iowa Uniform Transfers to Minors Act...................
(State)
(End of Note)
Section 14. Equality of Lien. The timely payment of principal of and interest on the
Notes and Parity Obligations shall be secured equally and ratably by the Net Revenues of the
System without priority by reason of number or time of sale or delivery; and the Net Revenues of
the System are hereby irrevocably pledged to the timely payment of both principal and interest as
the same become due.
Section 15. Application of Note Proceeds - Project Fund. Proceeds of the Notes shall be
credited to the Project Fund and expended therefrom for the purposes of issuance. Any amounts
on hand in the Project Fund shall be available for the payment of the principal of or interest on
the Notes at any time that other funds of the System shall be insufficient to the purpose, in which
event such funds shall be repaid to the Project Fund at the earliest opportunity. Any balance on
hand in the Project Fund and not immediately required for its purposes may be invested not
inconsistent with limitations provided by law, the Internal Revenue Code and this Resolution.
Section 16. User Rates. There has heretofore been established and published as required
by law, just and equitable rates or charges for the use of the service rendered by the System.
Said rates or charges shall be paid by the owner of each and every lot, parcel of real estate, or
building that is connected with and uses the System, by or through any part of the System or that
in any way uses or is served by the System. So long as the Notes are outstanding and unpaid the
rates or charges to consumers of services of the System shall be sufficient in each year for the
payment of the proper and reasonable expenses of operation and maintenance of the System and
for the payment of principal and interest on the Notes and Parity Obligations and obligations as
the same fall due, and to provide for the creation of reserves as hereinafter provided.
Any revenue paid and collected for the use of the System and its services by the Issuer or
any department, agency or instrumentality of the Issuer shall be used and accounted for in the
same manner as any other revenues derived from the operations of the System.
Section 17. Application of Revenues. The provisions in the Prior Note Resolutions
whereby there was created and is to be maintained a Water Revenue Bond Principal and Interest
Sinking Fund (the "Sinking Fund"), and for the monthly payment into said fund from the future
Net Revenues of the System such portion thereof as will be sufficient to meet the principal and
interest of the Outstanding Obligations, and maintaining a reserve therefor, are hereby ratified
and confirmed, and all such provisions inure to and constitute the security for the payment of the
principal and interest on Notes hereby authorized to be issued; provided, however, that the
amounts to be set aside and paid into the Sinking Fund in equal monthly installments from the
earnings shall be sufficient to pay the principal and interest due each year, not only on the
Outstanding Obligations, but also the principal and interest of the Notes herein authorized to be
issued and to maintain a reserve for the Outstanding Obligations. Except as may be otherwise
provided in the above Prior Note Resolutions, proceeds of the Notes or other funds may be
invested in Permitted Investments.
Nothing in this Resolution shall be construed to impair the rights vested in the
Outstanding Obligations. The amounts herein required to be paid into the various funds named
in this Section shall be inclusive of payments required in respect to the Outstanding
Obligations. The provisions of the legislation authorizing the Outstanding Obligations and the
provisions of this Resolution are to be construed wherever possible so that the same will not be
in conflict. In the event such construction is not possible, the provisions of the resolution first
adopted shall prevail until such time as the notes or bonds authorized by said resolution have
been paid in full or otherwise satisfied as therein provided at which time the provisions of this
Resolution shall again prevail.
At such time as the Outstanding Obligations are paid and so long as the Notes or Parity
Obligations remain outstanding and unpaid the same are discharged and satisfied in the manner
provided in this Resolution, the entire income and revenues of the system shall be deposited and
collected in a fund to be known as the Revenue Fund, and shall be disbursed only as follows:
(a) Operation and Maintenance Fund. Money in the Revenue Fund shall first
be disbursed to make deposits into a separate and special fund to pay current expenses.
The fund shall be known as the Water Revenue Operation and Maintenance Fund (the
"Operation and Maintenance Fund"). There shall be deposited in the Operation and
Maintenance Fund each month an amount sufficient to meet the current expenses of the
month plus an amount equal to 1/12th of expenses payable on an annual basis such as
insurance. After the first day of the month, further deposits may be made to this account
from the Revenue Fund to the extent necessary to pay current expenses accrued and
payable to the extent that funds are not available in the Surplus Fund.
(b) Sinking Fund. Money in the Revenue Fund shall next be disbursed to
make deposits into a separate and special fund to pay the principal and interest
requirements of the Fiscal Year on the Notes and Parity Obligations. The fund shall be
known as the Water Revenue Bond and Interest Sinking Fund (the "Sinking Fund"). The
required amount to be deposited in the Sinking Fund in any month shall be the equal
monthly amount necessary to pay in full the installment of interest coming due on the
next interest payment date on the then outstanding Notes and Parity Obligations, plus the
equal monthly amount necessary to pay in full the installment of principal coming due on
such Notes on the next succeeding principal payment date until the full amount of such
installment is on hand. If for any reason the amount on hand in the Sinking Fund exceeds
the required amount, the excess shall forthwith be withdrawn and paid into the Revenue
Fund. Money in the Sinking Fund shall be used solely for the purpose of paying principal
of and interest on the Notes and Parity Obligations as the same shall become due and
payable.
(c) Reserve Fund. Money in the Revenue Fund shall be disbursed to maintain
a debt service reserve in an amount equal to the Reserve Fund Requirement. Such fund
shall be known as the Water Revenue Debt Service Reserve Fund (the "Reserve Fund").
In each month there shall be deposited in the Reserve Fund an amount equal to 25 percent
of the amount required by this Resolution to be deposited in such month in the Sinking
Fund; provided, however, that when the amount on deposit in the Reserve Fund shall be
not less than the Reserve Fund Requirement, no further deposits shall be made into the
Reserve Fund except to maintain such level, and when the amount on deposit in the
Reserve Fund is greater than the balance required above, such additional amounts shall be
withdrawn and paid into the Revenue Fund. Money in the Reserve Fund shall be used
solely for the purpose of paying principal at maturity of or interest on the Parity
Obligations requiring a reserve, for the payment of which insufficient money shall be
available in the Sinking Fund. Whenever it shall become necessary to so use money in
the Reserve Fund, the payments required above shall be continued or resumed until it
shall have been restored to the required minimum amount. The Reserve Fund shall not
secure the Notes.
(d) Subordinate Obligations. Money in the Revenue Fund may next be used
to pay principal of and interest on (including reasonable reserves therefor) any other
obligations which by their terms shall be payable from the revenues of the System, but
subordinate to the Bonds and Parity Obligations, and which have been issued for the
purposes of extensions and improvements to the System or to retire the Bonds or Parity
Obligations in advance of maturity, or to pay for extraordinary repairs or replacements to
the System.
(e) Surplus Revenue. All money thereafter remaining in the Revenue Fund at
the close of each month may be deposited in any of the funds created by this Resolution,
to pay for extraordinary repairs or replacements to the System, or may be used to pay or
redeem the Bonds or Parity Obligations, any of them, or for any lawful purpose.
Money in the Revenue Fund shall be allotted and paid into the various funds and
accounts hereinbefore referred to in the order in which the funds are listed, on a cumulative basis
on the l0th day of each month, or on the next succeeding business day when the l0th shall not be
a business day; and if in any month the money in the Revenue Fund shall be insufficient to
deposit or transfer the required amount in any of the funds or accounts, the deficiency shall be
made up in the following month or months after payments into all funds and accounts enjoying a
prior claim to the revenues shall have been met in full. The provisions of this Section shall not
be construed to require the Issuer to maintain separate bank accounts for the funds created by this
Section; except the Sinking Fund and the Reserve Fund shall be maintained in a separate account
but may be invested in conjunction with other funds of the City but designated as a trust fund on
the books and records of the City.
Section 18. Investments. All of the funds provided by this Resolution may be invested
only in Permitted Investments or deposited in financial institutions which are members of the
Federal Deposit Insurance Corporation or its equivalent successor, and the deposits in which are
insured thereby and all such deposits exceeding the maximum amount insured from time to time
by FDIC or its equivalent successor in any one financial institution shall be continuously secured
in compliance with Chapter 12C of the Code of Iowa, 2025, as amended, or otherwise by a valid
pledge of direct obligations of the United States Government having an equivalent market value.
All such interim investments shall mature before the date on which the moneys are required for
the purposes for which the fund was created or otherwise as herein provided but in no event
maturing in more than three years in the case of the Reserve Fund.
All income derived from such investments shall be deposited in the Revenue Fund and
shall be regarded as revenues of the System. Investments shall at any time necessary be
liquidated and the proceeds thereof applied to the purpose for which the respective fund was
created.
Section 19. Covenants Regarding the Operation of the System. The Issuer hereby
covenants and agrees with each and every holder of the Notes and Parity Obligations:
(a) Maintenance and Efficiency. The Issuer will maintain the System in good
condition and operate it in an efficient manner and at reasonable cost.
(b) Sufficiency of Rates. On or before the beginning of each Fiscal Year the
Governing Body will adopt or continue in effect rates for all services rendered by the
System determined to be sufficient to produce Net Revenues for the next succeeding
Fiscal Year which are (i) adequate to pay the principal and interest requirements thereof
and to create or maintain the reserves as provided in this Resolution, and (ii) not less than
125 percent (so long as the Outstanding Obligations requiring said coverage remain a lien
on the Net Revenues of the System, thereafter 110 percent) of the principal and interest
requirements of the next succeeding Fiscal Year. No free use of the System by the Issuer
or any department, agency or instrumentality of the Issuer shall be permitted except upon
the determination of the Governing Body that the rates and changes otherwise in effect
are sufficient to provide Net Revenues at least equal to the requirements of this
subsection.
(c) Insurance. The Issuer shall maintain insurance for the benefit of the
Noteholders on the insurable portions of the System of a kind and in an amount which
normally would be carried by private companies engaged in a similar kind of business.
The proceeds of any insurance, except public liability insurance, shall be used to repair or
replace the part or parts of the System damaged or destroyed, or if not so used shall be
placed in the Revenue Fund.
(d) Accounting and Audits. The Issuer will cause to be kept proper books and
accounts adapted to the System and in accordance with generally accepted accounting
practices and will diligently act to cause the books and accounts to be audited annually
and reported upon not later than 270 days after the end of each Fiscal Year by an
Independent Auditor and will provide copies of the audit report to the holders of any of
the Notes and Parity Obligation upon request. The holder4s of any of the Notes and
Parity Obligations shall have at all reasonable times the right to inspect the System and
the records, accounts and data of the Issuer relating thereto.
(e) State Laws. The Issuer will faithfully and punctually perform all duties
with reference to the System required by the Constitution and laws of the State of Iowa,
including the making and collecting of reasonable and sufficient rates for services
rendered by the System as above provided, and will segregate the revenues of the System
and apply said revenues to the funds specified in this Resolution.
(f) Property. The Issuer will not sell, lease, mortgage or in any manner
dispose of the System, or any capital part thereof, including any and all extensions and
additions that may be made thereto, until satisfaction and discharge of all of the Notes
and Parity Obligations shall have been provided for in the manner provided in this
Resolution; provided, however, this covenant shall not be construed to prevent the
disposal by the Issuer of property which in the judgment of its Governing Body has
become inexpedient or unprofitable to use in connection with the System, or if it is to the
advantage of the System that other property of equal or higher value be substituted
therefor, and provided further that the proceeds of the disposition of such property shall
be placed in a revolving fund to be used in preference to other sources for capital
improvements to the System. Any such proceeds of the disposition of property acquired
with the proceeds of the Notes or Parity Obligations shall not be used to pay principal or
interest on the Notes and Parity Obligations or for payments into the Sinking Fund or
Reserve Fund.
(g) Fidelity Bond. That the Issuer shall maintain fidelity bond coverage in
amounts which normally would be carried by private companies engaged in a similar
kind of business on each officer or employee having custody of funds of the System.
(h) Additional Charges. The Issuer will require proper connecting charges
and/or other security for the payment of service charges.
(i) Budget. The Governing Body of the Issuer shall approve and conduct
operations pursuant to a system budget of revenues and current expenses for each Fiscal
Year. Such budget shall take into account revenues and current expenses during the
current and last preceding Fiscal Years. Copies of such budget and any amendments
thereto shall be provided to the holders of any of the Notes upon request.
(j) Loan and Disbursement Agreement. The Issuer will comply with the
terms and conditions of the Loan and Disbursement Agreement and perform as provided
thereunder.
Section 20. Remedies of Noteholders. Except as herein expressly limited the holder or
holders of the Notes and Parity Obligations 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 their Notes and interest thereon,
and of the pledge of the revenues made hereunder, and of all covenants of the Issuer hereunder.
Section 21. Prior Lien and Parity Obligations. The Issuer will issue no other notes,
bonds or obligations of any kind or nature payable from or enjoying a lien or claim on the
property or revenues of the System having priority over the Notes or Parity Obligations.
Additional Obligations may be issued on a parity and equality of rank with the Notes
with respect to the lien and claim of such Additional Obligations to the revenues of the System
and the money on deposit in the funds adopted by this Resolution, for the following purposes and
under the following conditions, but not otherwise:
(a) For the purpose of refunding any of the Notes or Parity Obligations which
shall have matured or which shall mature not later than three months after the date of
delivery of such refunding obligation and for the payment of which there shall be
insufficient money in the Sinking Fund and the Reserve Fund, if any;
(b) For the purpose of making extensions, additions, improvements or
replacements to the System, or refunding any outstanding Notes, Parity Obligations or
other obligations issued for such extensions, additions and improvements, if all of the
following conditions shall have been met:
(i) before any such Additional Obligations ranking on a parity are
issued, there will have been procured and filed with the City Clerk, a statement of
an Independent Auditor, or an independent financial consultant, not a regular
employee of the Issuer, reciting the opinion based upon necessary investigations
that the Net Revenues of the System for the preceding Fiscal Year (with
adjustments as hereinafter provided) 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 then outstanding Notes or Parity Obligations for both
principal of and interest on all Notes or Parity Obligations then outstanding which
are payable from the Net Revenues of the System and the Additional Obligations
then proposed to be issued.
For the purpose of determining the Net Revenues of the System for the
preceding Fiscal Year as aforesaid, the amount of the gross revenues for such year
may be adjusted by an independent consulting engineer, the Independent Auditor
or the independent financial consultant, so as to reflect any changes in the amount
of such revenues which would have resulted had any revision of the schedule of
rates or charges imposed at or prior to the time of the issuance of any such
Additional Obligations been in effect during all of such preceding Fiscal Year.
(ii) the Additional Obligations must be payable as to principal and as
to interest on the same month and day as the Notes herein authorized.
(iii) for the purposes of this Section, principal and interest falling due
on the first day of a Fiscal Year shall be deemed a requirement of the immediately
preceding Fiscal Year.
(iv) for the purposes of this Section, general obligation bonds or notes
shall be refunded only upon a finding of necessity by the Governing Body and
only to the extent the general obligation bonds or notes were issued or the
proceeds thereof were expended for the System.
(v) for purposes of this Section, "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.
Nothing in this Section shall prohibit or restrict the right of the Issuer to issue
additional revenue bonds or other revenue obligations and to provide that the principal of
and interest on said revenue bonds or obligations shall be payable out of the Net
Revenues of the System, provided that such additional revenue bonds or obligations shall
be junior and subordinate to the Notes.
Section 22. Disposition of Proceeds; Arbitrage Not Permitted. The Issuer reasonably
expects and covenants that no use will be made of the proceeds from the issuance and sale of the
Notes issued hereunder which will cause any of the Notes to be classified as arbitrage bonds
within the meaning of Section 148(a) and (b) of the Internal Revenue Code of the United States,
and that throughout the term of said Notes it will comply with the requirements of said statute
and regulations issued thereunder.
To the best knowledge and belief of the Issuer, there are no facts or circumstances that
would materially change the foregoing statements or the conclusion that it is not expected that
the proceeds of the Notes will be used in a manner that would cause the Notes to be arbitrage
bonds. Without limiting the generality of the foregoing, the Issuer hereby agrees to comply with
the provisions of the Tax Exemption Certificate and the provisions of the Tax Exemption
Certificate are hereby incorporated by reference as part of this Resolution. The Finance Director
is hereby directed to make and insert all calculations and determinations necessary to complete
the Tax Exemption Certificate in all respects and to execute and deliver the Tax Exemption
Certificate at issuance of the Notes to certify as to the reasonable expectations and covenants of
the Issuer at that date.
The Issuer covenants that it will treat as Yield Restricted any proceeds of the Notes
remaining unexpended after three years from the issuance and any other funds required by the
Tax Exemption Certificate to be so treated. If any investments are held with respect to the Notes
and Parity Obligations, the Issuer shall treat the same for the purpose of restricted yield as held in
proportion to the original principal amounts of each issue.
The Issuer covenants that it will exceed any investment yield restriction provided in this
Resolution only in the event that it shall first obtain an opinion of recognized bond counsel that
the proposed investment action will not cause the Notes to be classified as arbitrage bonds under
Section 148(a) and (b) the Internal Revenue Code or regulations issued thereunder.
The Issuer covenants that it will proceed with due diligence to spend the proceeds of the
Notes for the purpose set forth in this Resolution. The Issuer further covenants that it will make
no change in the use of the proceeds available for the construction of facilities or change in the
use of any portion of the facilities constructed therefrom by persons other than the Issuer or the
general public unless it has obtained an opinion of bond counsel or a revenue ruling that the
proposed project or use will not be of such character as to cause interest on any of the Notes not
to be exempt from federal income taxes in the hands of holders other than substantial users of the
project, under the provisions of Section 142(a) of the Internal Revenue Code of the United
States, related statutes and regulations.
Section 23. Additional Covenants, Representations and Warranties of the Issuer. The
Issuer certifies and covenants with the purchasers and holders of the Notes from time to time
outstanding that the Issuer through its officers, (a) will make such further specific covenants,
representations and assurances as may be necessary or advisable; (b) comply with all
representations, covenants and assurances contained in the Tax Exemption Certificate, which
Tax Exemption Certificate shall constitute a part of the contract between the Issuer and the
owners of the Notes; (c) consult with bond counsel (as defined in the Tax Exemption
Certificate); (d) pay to the United States, as necessary, such sums of money representing required
rebates of excess arbitrage profits relating to the Notes; (e) file such forms, statements and
supporting documents as may be required and in a timely manner; and (f) if deemed necessary or
advisable by its officers, to employ and pay fiscal agents, financial advisors, attorneys and other
persons to assist the Issuer in such compliance.
Section 24. Amendment of Resolution to Maintain Tax Exemption. This Resolution
may be amended without the consent of any owner of the Notes if, in the opinion of bond
counsel, such amendment is necessary to maintain tax exemption with respect to the Notes under
applicable Federal law or regulations.
Section 25. Discharge and Satisfaction of Notes. The covenants, liens and pledges
entered into, created or imposed pursuant to this Resolution may be fully discharged and
satisfied with respect to the Notes and Parity Obligations, or any of them, in any one or more of
the following ways:
(a) By paying the Notes or Parity Obligations when the same shall become
due and payable; and
(b) By depositing in trust with the Finance Director, or with a corporate
trustee designated by the Governing Body, for the payment of said obligations and
irrevocably appropriated exclusively to that purpose an amount in cash or direct
obligations of the United States the maturities and income of which shall be sufficient to
retire at maturity, or by redemption prior to maturity on a designated date upon which
said obligations may be redeemed, all of such obligations outstanding at the time,
together with the interest thereon to maturity or to the designated redemption date,
premiums thereon, if any that may be payable on the redemption of the same; provided
that proper notice of redemption of all such obligations to be redeemed shall have been
previously published or provisions shall have been made for such publication.
Upon such payment or deposit of money or securities, or both, in the amount and manner
provided by this Section, all liability of the Issuer with respect to the Notes or Parity Obligations
shall cease, determine and be completely discharged, and the holders thereof shall be entitled
only to payment out of the money or securities so deposited.
Section 26. Resolution a Contract. The provisions of this Resolution shall constitute a
contract between the Issuer and the holder or holders of the Notes and Parity Obligations, and
after the issuance of any of the Notes no change, variation or alteration of any kind in the
provisions of this Resolution shall be made in any manner, except as provided in the next
succeeding Section, until such time as all of the Notes and Parity Obligations, and interest due
thereon, shall have been satisfied and discharged as provided in this Resolution.
Section 27. Amendment of Resolution Without Consent. The Issuer may, without the
consent of or notice to any of the holders of the Bonds and Parity Obligations, amend or
supplement this Resolution for any one or more of the following purposes:
(a) to cure any ambiguity, defect, omission or inconsistent provision in this
Resolution or in the Notes or Parity Obligations; or to comply with any applicable
provision of law or regulation of federal or state agencies; provided, however, that such
action shall not materially adversely affect the interests of the holders of the Notes or
Parity Obligations;
(b) to change the terms or provisions of this Resolution to the extent necessary
to prevent the interest on the Notes or Parity Obligations from being includable within the
gross income of the holders thereof for federal income tax purposes;
(c) to grant to or confer upon the holders of the Notes or Parity Obligations
any additional rights, remedies, powers or authority that may lawfully be granted to or
conferred upon the holders of the Notes;
(d) to add to the covenants and agreements of the Issuer contained in this
Resolution other covenants and agreements of, or conditions or restrictions upon, the
Issuer or to surrender or eliminate any right or power reserved to or conferred upon the
Issuer in this Resolution; or
(e) to subject to the lien and pledge of this Resolution additional pledged
revenues as may be permitted by law.
Section 28. Amendment of Resolution Requiring Consent. This Resolution may be
amended from time to time if such amendment shall have been consented to by holders of not
less than two-thirds in principal amount of the Notes and Parity Obligations at any time
outstanding (not including in any case any Notes which may then be held or owned by or for the
account of the Issuer, but including such refunding obligations as may have been issued for the
purpose of refunding any of such Notes if such refunding obligations shall not then be owned by
the Issuer); but this Resolution may not be so amended in such manner as to:
(a) Make any change in the maturity or interest rate of the Notes, or modify
the terms of payment of principal of or interest on the Notes or any of them or impose
any conditions with respect to such payment;
(b) Materially affect the rights of the holders of less than all of the Notes and
Parity Obligations then outstanding; and
(c) Reduce the percentage of the principal amount of Notes, the consent of the
holders of which is required to effect a further amendment.
Whenever the Issuer shall propose to amend this Resolution under the provisions of this
Section, it shall cause notice of the proposed amendment to be filed with the Original Purchaser
and to be mailed by certified mail to each registered owner of any Note as shown by the records
of the Registrar. Such notice shall set forth the nature of the proposed amendment and shall state
that a copy of the proposed amendatory Resolution is on file in the office of the City Clerk.
Whenever at any time within one year from the date of the mailing of said notice there
shall be filed with the City Clerk an instrument or instruments executed by the holders of at least
two-thirds in aggregate principal amount of the Notes then outstanding as in this Section defined,
which instrument or instruments shall refer to the proposed amendatory Resolution described in
said notice and shall specifically consent to and approve the adoption thereof, thereupon, but not
otherwise, the Governing Body of the Issuer may adopt such amendatory Resolution and such
Resolution shall become effective and binding upon the holders of all of the Notes and Parity
Obligations.
Any consent given by the holder of a Note pursuant to the provisions of this Section shall
be irrevocable for a period of six months from the date of the instrument evidencing such consent
and shall be conclusive and binding upon all future holders of the same Note during such period.
Such consent may be revoked at any time after six months from the date of such instrument by
the holder who gave such consent or by a successor in title by filing notice of such revocation
with the City Clerk.
The fact and date of the execution of any instrument under the provisions of this Section
may be proved by the certificate of any officer in any jurisdiction who by the laws thereof is
authorized to take acknowledgments of deeds within such jurisdiction that the person signing
such instrument acknowledged before him the execution thereof, or may be proved by an
affidavit of a witness to such execution sworn to before such officer.
The amount and numbers of the Notes held by any person executing such instrument and
the date of his holding the same may be proved by an affidavit by such person or by a certificate
executed by an officer of a bank or trust company showing that on the date therein mentioned
such person had on deposit with such bank or trust company the Notes described in such
certificate.
Notwithstanding anything in this Section to the contrary, the holder or holders of 100%
of the Notes and Parity Obligations may consent to any amendment of this Resolution, or waive
any notices required hereunder, on such terms and under such conditions as said holders shall
determine to be appropriate.
Section 29. Severability. If any section, paragraph, or provision of this Resolution shall
be held to be invalid or unenforceable for any reason, the invalidity or unenforceability of such
section, paragraph or provision shall not affect any of the remaining provisions.
Section 30. Approval of Tax Exemption Certificate. Attached hereto is a form of Tax
Exemption Certificate stating the Issuer's reasonable expectations as to the use of the proceeds of
the Notes. The form of Tax Exemption Certificate is approved. The Issuer hereby agrees to
comply with the provisions of the Tax Exemption Certificate and the provisions of the Tax
Exemption Certificate are hereby incorporated by reference as part of this Resolution. The
Finance Director is hereby directed to make and insert all calculations and determinations
necessary to complete the Tax Exemption Certificate at issuance of the Notes to certify as to the
reasonable expectations and covenants of the Issuer at that date.
Section 31. Repeal of Conflicting Ordinances or Resolutions and Effective Date. All
other ordinances, resolutions and orders, or parts thereof, in conflict with the provisions of this
Resolution are, to the extent of such conflict, hereby repealed; and this Resolution shall be in
effect from and after its adoption.
Section 33. Rule of Construction. This Resolution and the terms and conditions of the
Notes authorized hereby shall be construed whenever possible so as not to conflict with the terms
and conditions of the Loan and Disbursement Agreement. In the event such construction is not
possible, or in the event of any conflict or inconsistency between the terms hereof and those of
the Loan and Disbursement Agreement, the terms of the Loan and Disbursement Agreement
shall prevail and be given effect to the extent necessary to resolve any such conflict or
inconsistency.
PASSED AND APPROVED this 17th day of November, 2025.
Mayor
ATTEST:
City Clerk
TAX EXEMPTION CERTIFICATE
of
CITY OF WAUKEE, COUNTY OF DALLAS, STATE OF IOWA, ISSUER
$7,000,000 Water Revenue Capital Loan Notes, Series 2025
This instrument was prepared by:
Ahlers & Cooney, P.C.
100 Court Avenue, Suite 600
Des Moines, Iowa 50309
(515) 243-7611
i
TABLE OF CONTENTS
This Table of Contents is not a part of this Tax Exemption Certificate and is provided
only for convenience of reference.
INTRODUCTION..................................................................................................................... - 1 -
ARTICLE I DEFINITIONS .................................................................................................... - 1 -
ARTICLE II SPECIFIC CERTIFICATIONS, REPRESENTATIONS AND
AGREEMENTS ............................................................................................................ - 4 -
Section 2.1 Authority to Certify and Expectations .................................................... - 4 -
Section 2.2 Receipts and Expenditures of Sale Proceeds .......................................... - 6 -
Section 2.3 Purpose of Bonds .................................................................................... - 7 -
Section 2.4 Facts Supporting Tax-Exemption Classification .................................... - 7 -
Section 2.5 Facts Supporting Temporary Periods for Proceeds ................................ - 7 -
Section 2.6 Resolution Funds at Restricted or Unrestricted Yield ............................ - 8 -
Section 2.7 Pertaining to Yields................................................................................. - 9 -
ARTICLE III REBATE ........................................................................................................... - 9 -
Section 3.1 Records ................................................................................................... - 9 -
Section 3.2 Rebate Fund ............................................................................................ - 9 -
Section 3.3 Exceptions to Rebate............................................................................. - 10 -
Section 3.4 Calculation of Rebate Amount.............................................................. - 10 -
Section 3.5 Rebate Requirements and the Bond Fund ............................................. - 10 -
Section 3.6 Investment of the Rebate Fund ............................................................. - 11 -
Section 3.7 Payment to the United States ................................................................ - 11 -
Section 3.8 Records ................................................................................................. - 11 -
Section 3.9 Additional Payments ............................................................................. - 12 -
ARTICLE IV INVESTMENT RESTRICTIONS ................................................................ - 12 -
Section 4.1 Avoidance of Prohibited Payments ....................................................... - 12 -
Section 4.2 Market Price Requirement .................................................................... - 12 -
Section 4.3 Investment in Certificates of Deposit ................................................... - 13 -
Section 4.4 Investment Pursuant to Investment Contracts and Agreements ........... - 13 -
Section 4.5 Records ................................................................................................. - 15 -
Section 4.6 Investments to be Legal ........................................................................ - 15 -
ARTICLE V GENERAL COVENANTS ............................................................................. - 16 -
ARTICLE VI AMENDMENTS AND ADDITIONAL AGREEMENTS .......................... - 16 -
Section 6.1 Opinion of Bond Counsel; Amendments .............................................. - 16 -
Section 6.2 Additional Covenants, Agreements ...................................................... - 16 -
Section 6.3 Internal Revenue Service Audits .......................................................... - 16 -
Section 6.4 Amendments ......................................................................................... - 16 -
EXHIBIT "A" ..............................................................................................................................18
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TAX EXEMPTION CERTIFICATE
CITY OF WAUKEE, STATE OF IOWA
THIS TAX EXEMPTION CERTIFICATE made and entered into on December 19, 2025,
by the City of Waukee, County of Dallas, State of Iowa (the "Issuer").
INTRODUCTION
This Certificate is executed and delivered in connection with the issuance by the Issuer of
its $7,000,000 Water Revenue Capital Loan Notes, Series 2025 (the "Bonds"). The Bonds are
issued pursuant to the provisions of the Resolution of the Issuer authorizing the issuance of the
Bonds. Such Resolution provides that the covenants contained in this Certificate constitute a
part of the Issuer's contract with the owners of the Bonds.
The Issuer recognizes that under the Code (as defined below) the tax-exempt status of the
interest received by the owners of the Bonds is dependent upon, among other things, the facts,
circumstances, and reasonable expectations of the Issuer as to future facts not in existence at this
time, as well as the observance of certain covenants in the future. The Issuer covenants that it
will take such action with respect to the Bonds as may be required by the Code, and pertinent
legal regulations issued thereunder in order to establish and maintain the tax-exempt status of the
Bonds, including the observance of all specific covenants contained in the Resolution and this
Certificate.
ARTICLE I
DEFINITIONS
The following terms as used in this Certificate shall have the meanings set forth below.
The terms defined in the Resolution shall retain the meanings set forth therein when used in this
Certificate. Other terms used in this Certificate shall have the meanings set forth in the Code or
in the Regulations.
• "Annual Debt Service" means the principal of and interest on the Bonds
scheduled to be paid during a given Bond Year.
• "Bonds" means the $7,000,000 aggregate principal amount of Water
Revenue Capital Loan Notes, Series 2025, of the Issuer issued in registered form
pursuant to the Resolution.
• "Bond Counsel" means Ahlers & Cooney, P.C., Des Moines, Iowa, or an
attorney at law or a firm of attorneys of nationally recognized standing in matters
pertaining to the tax-exempt status of interest on obligations issued by states and their
political subdivisions, duly admitted to the practice of law before the highest court of any
State of the United States of America.
• "Bond Fund" means the Sinking Fund described in the Resolution.
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• "Bond Purchase Agreement" means the binding contract in writing for the
sale of the Bonds.
• "Bond Year" as defined in Regulation 1.148-1(b), means a one-year period
beginning on the day after expiration of the preceding Bond Year. The first Bond Year
shall be the one-year or shorter period beginning on the Closing Date and ending on a
principal or interest payment date, unless Issuer selects another date.
• "Bond Yield" means that discount rate which produces an amount equal to
the Issue Price of the Bonds when used in computing the present value of all payments of
principal and interest to be paid on the Bonds, using semiannual compounding on a 360-
day year as computed under Regulation 1.148-4.
• "Certificate" means this Tax Exemption Certificate.
• "Closing" means the delivery of the Bonds in exchange for the agreed
upon purchase price.
• "Closing Date" means the date of Closing.
• "Code" means the Internal Revenue Code of 1986, as amended, and any
statutes which replace or supplement the Internal Revenue Code of 1986.
• "Computation Date" means each five-year period from the Closing Date
through the last day of the fifth and each succeeding fifth Bond Year.
• "Excess Earnings" means the amount earned on all Nonpurpose
Investments minus the amount which would have been earned if such Nonpurpose
Investments were invested at a rate equal to the Bond Yield, plus any income attributable
to such excess.
• "Final Bond Retirement Date" means the date on which the Bonds are
actually paid in full.
• "Financial Advisor" means PFM Financial Advisors LLC.
• "Governmental Obligations" means direct general obligations of, or
obligations the timely payment of the principal of and interest on which is
unconditionally guaranteed by the United States.
• "Gross Proceeds" as defined in Regulation 1.148-l(b), means any Proceeds
of the Bonds and any replacement proceeds (as defined in Regulation 1.148-1(c)) of the
Bonds.
• "Gross Proceeds Funds" means the Reserve Fund, Project Fund, Proceeds
held to pay cost of issuance, and any other fund or account held for the benefit of the
owners of the Bonds or containing Gross Proceeds of the Bonds except the Bond Fund
and the Rebate Fund.
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• "Issue Price" as defined in Regulation 1.148-l(b) and (f)(2), means the
price paid by the Purchaser of the Bonds. The Issue Price is $11,000,000, as set forth in
Exhibit A.
• "Issuer" means the City of Waukee, a municipal corporation in the County
of Dallas, State of Iowa.
• "Minor Portion of the Bonds", as defined in Regulation 1.148-2(g), means
the lesser of five (5) percent of Proceeds or $100,000. The Minor Portion of the Bonds is
computed to be $100,000.
• "Nonpurpose Investments" means any investment property which is
acquired with Gross Proceeds and is not acquired to carry out the governmental purpose
of the Bonds, and may include but is not limited to U.S. Treasury bonds, corporate bonds,
or certificates of deposit.
• "Proceeds" as defined in Regulation 1.148-l(b), means Sale Proceeds,
investment proceeds and transferred proceeds of the Bonds.
• "Project" means the acquisition, construction, reconstruction, extending,
remodeling, improving, repairing and equipping all or part of the Municipal Water
Utility, including those costs associated with the CIWW Asset Transfer project including
sums already expended that meet the requirements of Section 2.8 hereof, as more fully
described in the Resolution.
• "Project Fund" shall mean the fund required to be established by the
Resolution for the deposit of the Proceeds of the Notes.
• "Purchasers" means Iowa Finance Authority of Des Moines, Iowa,
constituting the initial purchasers of the Bonds from the Issuer.
• "Rebate Amount" means the amount computed as described in this
Certificate.
• "Rebate Fund" means the fund to be created, if necessary, pursuant to this
Certificate.
• "Rebate Payment Date" means a date chosen by the Issuer which is not
more than 60 days following each Computation Date or the Final Bond Retirement Date.
• "Regulations" means the Income Tax Regulations, amendments and
successor provisions promulgated by the Department of the Treasury under Sections 103,
148 and 149 of the Code, or other Sections of the Code relating to "arbitrage bonds",
including without limitation Regulations 1.148-1 through 1.148-11, 1.149(b)-1, 1.149-
d(1), 1.150-1 and 1.150-2.
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• "Replacement Proceeds" include, but are not limited to, sinking funds,
amounts that are pledged as security for an issue, and amounts that are replaced because
of a sufficiently direct nexus to a governmental purpose of an issue.
• "Resolution" means the resolution of the Issuer adopted on November 17,
2025, authorizing the issuance of the Bonds.
• "Sale Proceeds" as defined in Regulation 1.148-1(b), means any amounts
actually or constructively received from the sale of the Bonds, including amounts used to
pay underwriter's discount or compensation and accrued interest other than pre-issuance
accrued interest.
• "Sinking Fund" means the Bond Fund.
• "SLGS" means demand deposit Treasury securities of the State and Local
Government Series.
• "Tax Exempt Obligations" means bonds or other obligations the interest
on which is excludable from the gross income of the owners thereof under Section 103 of
the Code and include certain regulated investment companies, stock in tax-exempt mutual
funds and demand deposit SLGS.
• "Taxable Obligations" means all investment property, obligations or
securities other than Tax Exempt Obligations.
• "Verification Certificate" means the certificate attached to this Certificate
as Exhibit A, establishing the Purchaser will not reoffer or sell the Bonds to the public.
ARTICLE II
SPECIFIC CERTIFICATIONS, REPRESENTATIONS
AND AGREEMENTS
The Issuer hereby certifies, represents and agrees as follows:
Section 2.1 Authority to Certify and Expectations
(a)The undersigned officer of the Issuer along with other officers of the
Issuer, are charged with the responsibility of issuing the Bonds.
(b)This Certificate is being executed and delivered in part for the purposes
specified in Section 1.148-2(b)(2) of the Regulations and is intended (among other
purposes) to establish reasonable expectations of the Issuer at this time.
(c)The Issuer has not been notified of any disqualification or proposed
disqualification of it by the Commissioner of the Internal Revenue Service as a bond
issuer which may certify bond issues under Section 1.148-2(b)(2) of the Regulations.
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(d)The certifications, representations and agreements set forth in this Article
II are made on the basis of the facts, estimates and circumstances in existence on the date
hereof, including the following: (1) with respect to amounts expected to be received from
delivery of the Bonds, amounts actually received, (2) with respect to payments of
amounts into various funds or accounts, review of the authorizations or directions for
such payments made by the Issuer pursuant to the Resolution and this Certificate, (3)
with respect to the Issue Price, the certifications of the Purchasers as set forth in the
Verification Certificate, (4) with respect to expenditure of the Proceeds of the Bonds,
actual expenditures and reasonable expectations of the Issuer as to when the Proceeds
will be spent for purposes of the Project, and (5) with respect to Bond Yield, review of
the Verification Certificate. The Issuer has no reason to believe such facts, estimates or
circumstances are untrue or incomplete in any material way.
(e)To the best of the knowledge and belief of the undersigned officer of the
Issuer, there are no facts, estimates or circumstances that would materially change the
representations, certifications or agreements set forth in this Certificate, and the
expectations herein set out are reasonable.
(f)No arrangement exists under which the payment of principal or interest on
the Bonds would be directly or indirectly guaranteed by the United States or any agency
or instrumentality thereof.
(g)After the expiration of any applicable temporary periods, and excluding
investments in a bona fide debt service fund or reserve fund, not more than five percent
(5%) of the Proceeds of the Bonds will be (a) used to make loans which are guaranteed
by the United States or any agency or instrumentality thereof, or (b) invested in federally
insured deposits or accounts.
(h)The Issuer will file with the Internal Revenue Service in a timely fashion
Form 8038-G, Information Return for Tax-Exempt Governmental Obligations with
respect to the Bonds and such other reports required to comply with the Code and
applicable Regulations.
(i)The Issuer will take no action which would cause the Bonds to become
"private activity bonds" as defined in Section 141 (a) of the Code, including any use of
the Project by any person other than a governmental unit if such use will be by other than
a member of the general public. None of the Proceeds of the Bonds will be used directly
or indirectly to make or finance loans to any person other than a governmental unit.
(j)The Issuer will make no change in the nature or purpose of the Project
except as provided in Section 6.1 hereof.
(k)Except as provided in the Resolution, the Issuer will not establish any
sinking fund, bond fund, reserve fund, debt service fund or other fund reasonably
expected to be used to pay debt service on the Bonds (other than the Bond Fund and any
Reserve Fund), exercise its option to redeem Bonds prior to maturity or effect a refunding
of the Bonds.
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(l)No bonds or other obligations of the Issuer (1) were sold in the 15 days
preceding the date of sale of the Bonds, (2) were sold or will be sold within the 15 days
after the date of sale of the Bonds, (3) have been delivered in the past 15 days or (4) will
be delivered in the next 15 days pursuant to a common plan of financing for the issuance
of the Bonds and payable out of substantially the same source of revenues.
(m)None of the Proceeds of the Bonds will be used directly or indirectly to
replace funds of the Issuer used directly or indirectly to acquire obligations having a yield
higher than the Bond Yield.
(n)No portion of the Bonds is issued for the purpose of investing such portion
at a higher yield than the Bond Yield.
(o)The Issuer does not expect that the Proceeds of the Bonds will be used in a
manner that would cause them to be "arbitrage bonds" as defined in Section 148(a) of the
Code. The Issuer does not expect that the Proceeds of the Bonds will be used in a
manner that would cause the interest on the Bonds to be includible in the gross income of
the owners of the Bonds under the Code. The Issuer will not intentionally use any
portion of the Proceeds to acquire higher yielding investments.
(p)The Issuer will not use the Proceeds of the Bonds to exploit the difference
between tax-exempt and taxable interest rates to obtain a material financial advantage.
(q)The Issuer has not issued more Bonds, issued the Bonds earlier, or allowed
the Bonds to remain outstanding longer than is reasonably necessary to accomplish the
governmental purposes of the Bonds and in fact, the Bonds will not remain outstanding
longer than 120% of the economic useful life of the assets financed with the Proceeds of
the Bonds.
(r)The Bonds will not be Hedge Bonds as described in Section 149(g)(3) of
the Code because the Issuer reasonably expects that it will meet the Expenditure test set
forth in Section 2.5(b) hereof and that 50% or more of the Proceeds will not be invested
in Nonpurpose Investments having a substantially guaranteed yield for four or more
years.
Except for costs of issuance, all Sale Proceeds and investment earnings thereon will be
expended for costs of the type that would be chargeable to capital accounts under the Code
pursuant to federal income tax principles if the Issuer were treated as a corporation subject to
federal income taxation.
Section 2.2 Receipts and Expenditures of Sale Proceeds
Sale Proceeds disbursed over time are expected to be expended as follows:
(a)$74,531.25 representing costs of issuing the Bonds (including the
Initiation fee ($55,000) for the Loan) will be used within six months of the Closing Date
to pay the costs of issuance of the Bonds (with any excess remaining on deposit in the
Project Fund); and
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(b)$6,925,468.75 will be deposited into the Project Fund and will be used
together with earnings thereon to pay the costs of the Project and will not exceed the
amount necessary to accomplish the governmental purposes of the Bonds.
Section 2.3 Purpose of Bonds
The Issuer is issuing the Bonds to pay the costs of acquisition, construction,
reconstruction, extending, remodeling, improving, repairing and equipping all or part of the
Municipal Water Utility, including those costs associated with the CIWW Asset Transfer project.
Section 2.4 Facts Supporting Tax-Exemption Classification
Governmental Bonds
Private Business Use/Private Security or Payment Tests
The Bonds are considered to be governmental bonds. The Proceeds will be used
for the purposes described in Section 2.3 hereof. These bonds are not private activity
bonds because no amount of Proceeds of the Bonds is to be used in a trade or business
carried on by a non-governmental unit to the extent which would create excessive private
activity over the life of the Bonds so as to cause the Bonds to be private activity bonds.
Rather, the Proceeds will be used to finance the general government operations and
facilities of the Issuer described in Section 2.3 hereof. None of the payment of principal
or interest on the Bonds will be derived from, or secured by, money or property used in a
trade or business of a non-governmental unit. In addition, none of the governmental
operations or facilities of the Issuer being financed with the Proceeds of the Bonds are
subject to any lease, management contract or other similar arrangement or to any
arrangement for use other than as by the general public.
Private Loan Financing Test
No amount of Proceeds of the Bonds is to be used directly or indirectly to make or
finance loans to persons other than governmental units.
Output Facilities (water facilities)
The Issuer will use all or a portion of the Proceeds of the Bonds to finance an output
facility.
The Issuer will comply with the Code and Regulations with respect to output facilities
applicable to the Bonds.
Section 2.5 Facts Supporting Temporary Periods for Proceeds
(a)Time Test. Not later than six months after the Closing Date, the Issuer
will incur a substantial binding obligation to a third party to expend at least 5% of the net
Sale Proceeds of the Bonds.
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(b)Expenditure Test. Not less than 85% of the net Sale Proceeds will be
expended for Project costs, including the reimbursement of other funds expended to date,
within a three-year temporary period from the Closing Date.
(c)Due Diligence Test. Not later than six months after Closing, work on the
Project will have commenced and will proceed with due diligence to completion.
(d)Proceeds of the Bonds representing less than six months accrued interest
on the Bonds will be spent within six months of this date to pay interest on the Bonds,
and will be invested without restriction as to yield for a temporary period not in excess of
six months.
Section 2.6 Resolution Funds at Restricted or Unrestricted Yield
(a)Proceeds of the Bonds will be held and accounted for in the manner
provided in the Resolution. The Issuer has not and does not expect to create or establish
any other bond fund, reserve fund, or similar fund or account for the Bonds. The Issuer
has not and will not pledge any moneys or Taxable Obligations in order to pay debt
service on the Bonds or restrict the use of such moneys or Taxable Obligations so as to
give reasonable assurances of their availability for such purposes.
(b)Any monies which are invested beyond a temporary period are expected to
constitute less than a major portion of the Bonds or to be restricted for investment at a
yield not greater than one-eighth of one percent above the Bond Yield.
(c)The Issuer has established and will use the Bond Fund primarily to
achieve a proper matching of revenues and debt service within each Bond Year and the
Issuer will apply moneys deposited into the Bond Fund to pay the principal of and
interest on the Bonds. Such Fund will be depleted at least once each Bond Year except
for a reasonable carryover amount. The carryover amount will not exceed the greater of
(1) one year's earnings on the Bond Fund or (2) one-twelfth of Annual Debt Service. The
Issuer will spend moneys deposited from time to time into such fund within 13 months
after the date of deposit. Revenues, intended to be used to pay debt service on the Bonds,
will be deposited into the Bond Fund as set forth in the Resolution. The Issuer will spend
interest earned on moneys in such fund not more than 12 months after receipt.
Accordingly, the Issuer will treat the Bond Fund as a bona fide debt service fund as
defined in Regulation 1.148-1(b).
Investment of amounts on deposit in the Bond Fund will not be subject to
arbitrage rebate requirements as the Bonds meet the safe harbor set forth in Regulation
1.148-3(k), because the average annual debt service on the Bonds will not exceed
$2,500,000, the Bonds meet the safe harbor set forth in Code Section 148(f)(4)(A)
because the Bonds are not private activity bonds, the average maturity of the issue
(determined in accordance with Code Section 147(b)(2)(A)) is at least 5 years and the
rates of interest on the bonds which are part of the issue do not vary during the term of
the issue, the Bonds are expected to meet one or more of the spending exemptions from
rebate as provided in Section 3.3 hereof.
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(d)The Minor Portion of the Bonds will be invested without regard to yield.
Section 2.7 Pertaining to Yields
(a)The purchase price of all Taxable Obligations to which restrictions apply
under this Certificate as to investment yield or rebate of Excess Earnings, if any, has been
and shall be calculated using (i) the price taking into account discount, premium and
accrued interest, as applicable, actually paid or (ii) the fair market value if less than the
price actually paid and if such Taxable Obligations were not purchased directly from the
United States Treasury. The Issuer will acquire all such Taxable Obligations directly
from the United States Treasury or in an arm's length transaction without regard to any
amounts paid to reduce the yield on such Taxable Obligations. The Issuer will not pay or
permit the payment of any amounts (other than to the United States) to reduce the yield
on any Taxable Obligations. Obligations pledged to the payment of debt service on the
Bonds, or deposited into any reserve fund after they have been acquired by the Issuer will
be treated as though they were acquired for their fair market value on the date of such
pledge or deposit. Obligations on deposit in any reserve fund on the Closing Date shall
be treated as if acquired for their fair market value on the Closing Date.
(b)Qualified guarantees have not been used in computing yield.
(c)The Bond Yield has been computed as not less than 3.010112% percent.
This Bond Yield has been computed on the basis of a purchase price for the Bonds equal
to the Issue Price.
ARTICLE III
REBATE
Section 3.1 Records
Sale Proceeds of the Bonds will be held and accounted for in the manner provided in the
Resolution. The Issuer will maintain adequate records for funds created by the Resolution and
this Certificate including all deposits, withdrawals, transfers from, transfers to, investments,
reinvestments, sales, purchases, redemptions, liquidations and use of money or obligations until
six years after the Final Bond Retirement Date.
Section 3.2 Rebate Fund
(a)In the Resolution, the Issuer has covenanted to pay to the United States the
Rebate Amount, an amount equal to the Excess Earnings on the Gross Proceeds Funds, if
any, at the times and in the manner required or permitted and subject to stated special
rules and allowable exceptions.
(b)The Issuer may establish a fund pursuant to the Resolution and this
Certificate which is herein referred to as the Rebate Fund. The Issuer will invest and
expend amounts on deposit in the Rebate Fund in accordance with this Certificate.
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(c)Moneys in the Rebate Fund shall be held by the Issuer or its designee and,
subject to Sections 3.4, 3.5 and 6.1 hereof, shall be held for future payment to the United
States as contemplated under the provisions of this Certificate and shall not constitute
part of the trust estate held for the benefit of the owners of the Bonds or the Issuer.
(d)The Issuer will pay to the United States from legally available money of
the Issuer (whether or not such available money is on deposit in any fund or account
related to the Bonds) any amount which is required to be paid to the United States.
Section 3.3 Exceptions to Rebate
The Issuer reasonably expects that the Bonds are eligible for one or more exceptions from
the arbitrage rebate rules set forth in the Regulations. If any Proceeds are ineligible, or become
ineligible, for an exception to the arbitrage rebate rules, the Issuer will comply with the
provisions of this Article III. A description of the applicable rebate exception(s) is as follows:
• Six Month Exception
The Gross Proceeds of the Bonds are expected to be fully expended for the governmental
purposes for which the Bonds were issued no later than six months after the date of issue. If
contrary to the reasonable expectations of the Issuer, the Gross Proceeds are not expended within
six months, the Issuer will comply with the arbitrage rebate requirements of the Code.
If the Issuer fails to meet the foregoing expenditure schedule, the Issuer shall comply
with the arbitrage rebate requirements of the Code.
Section 3.4 Calculation of Rebate Amount
(a)As soon after each Computation Date as practicable, the Issuer shall, if
necessary, calculate and determine the Excess Earnings on the Gross Proceeds Funds (the
"Rebate Amount"). All calculations and determinations with respect to the Rebate
Amount will be made on the basis of actual facts as of the Computation Date and
reasonable expectations as to future events.
(b)If the Rebate Amount exceeds the amount currently on deposit in the
Rebate Fund, the Issuer may deposit an amount in the Rebate Fund such that the balance
in the Rebate Fund after such deposit equals the Rebate Amount. If the amount in the
Rebate Fund exceeds the Rebate Amount, the Issuer may withdraw such excess amount
provided that such withdrawal can be made from amounts originally transferred to the
Rebate Fund and not from earnings thereon, which may not be transferred, and only if
such withdrawal may be made without liquidating investments at a loss.
Section 3.5 Rebate Requirements and the Bond Fund
It is expected that the Bond Fund described in the Resolution and Section 2.6(c) of this
Certificate will be treated as a bona fide debt service fund as defined in Regulation 1.148-1(b).
As such, any amount earned during a Bond Year on the Bond Fund and amounts earned on such
amounts, if allocated to the Bond Fund, will not be taken into account in calculating the Rebate
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Amount for the reasons outlined in Section 2.6(c) hereof. However, should the Bond Fund cease
to be treated as a bona fide debt service fund, the Bond Fund will become subject to the rebate
requirements set forth in Section 3.4 hereof.
Section 3.6 Investment of the Rebate Fund
(a)Immediately upon a transfer to the Rebate Fund, the Issuer may invest all
amounts in the Rebate Fund not already invested and held in the Rebate Fund, to the
extent possible, in (1) SLGS, such investments to be made at a yield of not more than
one-eighth of one percent above the Bond Yield, (2) Tax Exempt Obligations, (3) direct
obligations of the United States or (4) certificates of deposit of any bank or savings and
loan association. All investments in the Rebate Fund shall be made to mature not later
than the next Rebate Payment Date.
(b)If the Issuer invests in SLGS, the Issuer shall file timely subscription
forms for such securities (if required). To the extent possible, amounts received from
maturing SLGS shall be reinvested immediately in zero yield SLGS maturing on or
before the next Rebate Payment Date.
Section 3.7 Payment to the United States
(a)On each Rebate Payment Date, the Issuer will pay to the United States at
least ninety percent (90%) of the Rebate Amount less a computation credit of $1,000 per
Bond Year for which the payment is made.
(b)The Issuer will pay to the United States not later than sixty (60) days after
the Final Bond Retirement Date all the rebatable arbitrage as of such date and any income
attributable to such rebatable arbitrage as described in Regulation 1.148-3(f)(2).
(c)If necessary, on each Rebate Payment Date, the Issuer will mail a check to
the Internal Revenue Service Center, Ogden, UT 84201. Each payment shall be
accompanied by a copy of Form 8038-T, Arbitrage Rebate, filed with respect to the
Bonds or other information reporting form as is required to comply with the Code and
applicable Regulations.
Section 3.8 Records
(a)The Issuer will keep and retain adequate records with respect to the
Bonds, the Gross Proceeds Funds, the Bond Fund, the Reserve Fund, and the Rebate
Fund until six years after the Final Bond Retirement Date. Such records shall include
descriptions of all calculations of amounts transferred to the Rebate Fund, if any, and
descriptions of all calculations of amounts paid to the United States as required by this
Certificate. Such records will also show all amounts earned on moneys invested in such
funds, and the actual dates and amounts of all principal, interest and redemption
premiums (if any) paid on the Bonds.
(b)Records relating to the investments in such Funds shall completely
describe all transfers, deposits, disbursements and earnings including:
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(1)a complete list of all investments and reinvestments of amounts in
each such Fund including, if applicable, purchase price, purchase date, type of
security, accrued interest paid, interest rate, dated date, principal amount, date of
maturity, interest payment dates, date of liquidation, receipt upon liquidation,
market value of such investment on the Final Bond Retirement Date if held by the
Issuer on the Final Bond Retirement Date, and market value of the investment on
the date pledged to the payment of the Bonds or the date of deposit into the
Reserve Fund, or the Closing Date if different from the purchase date.
(2)the amount and source of each payment to, and the amount,
purpose and payee of each payment from, each such Fund.
Section 3.9 Additional Payments
The Issuer hereby agrees to pay to the United States from legally available money of the
Issuer (whether or not such available money is on deposit in any fund or account related to the
Bonds) any amount which is required to be paid to the United States, but which is not available
in a fund related to the Bonds for transfer to the Rebate Fund or payment to the United States.
ARTICLE IV
INVESTMENT RESTRICTIONS
Section 4.1 Avoidance of Prohibited Payments
The Issuer will not enter into any transaction that reduces the amount required to be
deposited into the Rebate Fund or paid to the United States because such transaction results in a
smaller profit or a larger loss than would have resulted if the transaction had been at arm's length
and had the Bond Yield not been relevant to either party. The Issuer will not invest or direct the
investment of any funds in a manner which reduces an amount required to be paid to the United
States because such transaction results in a small profit or larger loss than would have resulted if
the transaction had been at arm's length and had the Bond Yield not been relevant to the Issuer.
In particular, notwithstanding anything to the contrary contained herein or in the Resolution, the
Issuer will not invest or direct the investment of any funds in a manner which would violate any
provision of this Article IV.
Section 4.2 Market Price Requirement
(a)The Issuer will not purchase or direct the purchase of Taxable Obligations
for more than the then available market price for such Taxable Obligations. The Issuer
will not sell, liquidate or direct the sale or liquidation of Taxable Obligations for less than
the then available market price.
(b)For purposes of this Certificate, United States Treasury obligations
purchased directly from the United States Treasury will be deemed to be purchased at the
market price.
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Section 4.3 Investment in Certificates of Deposit
(a)Notwithstanding anything to the contrary contained herein or in the
Resolution, the Issuer will invest or direct the investment of funds on deposit in the
Reserve Fund, any other Gross Proceeds Fund, the Bond Fund, and the Rebate Fund, in a
certificate of deposit of a bank or savings bank which is permitted by law and by the
Resolution only if the purchase price of such a certificate of deposit is treated as its fair
market value on the purchase date and if the yield on the certificate of deposit is not less
than (1) the yield on reasonably comparable direct obligations of the United States; and
(2) the highest yield that is published or posted by the provider to be currently available
from the provider on reasonably comparable certificates of deposit offered to the public.
(b)The certificate of deposit described in paragraph 4.3(a) above must be
executed by a dealer who maintains an active secondary market in comparable
certificates of deposit and must be based on actual trades adjusted to reflect the size and
term of that certificate of deposit and the stability and reputation of the bank or savings
bank issuing the certificate of deposit.
Section 4.4 Investment Pursuant to Investment Contracts and Agreements
The Issuer will invest or direct the investment of funds on deposit in the Gross Proceeds
Funds, the Bond Fund, and the Rebate Fund pursuant to an investment contract (including a
repurchase agreement) only if all of the following requirements are satisfied:
(a)The Issuer makes a bona fide solicitation for the purchase of the
investment. A bona fide solicitation is a solicitation that satisfies all of the following
requirements:
(1)The bid specifications are in writing and are timely forwarded to
potential providers.
(2)The bid specifications include all material terms of the bid. A term
is material if it may directly or indirectly affect the yield or the cost of the
investment.
(3)The bid specifications include a statement notifying potential
providers that submission of a bid is a representation that the potential provider
did not consult with any other potential provider about its bid, that the bid was
determined without regard to any other formal or informal agreement that the
potential provider has with the issuer or any other person (whether or not in
connection with the Bonds), and that the bid is not being submitted solely as a
courtesy to the issuer or any other person for purposes of satisfying the
requirements of paragraph (d)(6)(iii)(B)(1) or (2) of Section 1.148-5 of the
Regulations.
(4)The terms of the bid specifications are commercially reasonable.
A term is commercially reasonable if there is a legitimate business purpose for the
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term other than to increase the purchase price or reduce the yield of the
investment.
(5)For purchases of guaranteed investment contracts only, the terms
of the solicitation take into account the Issuer's reasonably expected deposit and
drawdown schedule for the amounts to be invested.
(6)All potential providers have an equal opportunity to bid and no
potential provider is given the opportunity to review other bids (i.e., a last look)
before providing a bid.
(7)At least three reasonably competitive providers are solicited for
bids. A reasonably competitive provider is a provider that has an established
industry reputation as a competitive provider of the type of investments being
purchased.
(b)The bids received by the Issuer meet all of the following requirements:
(1)The Issuer receives at least three bids from providers that the
Issuer solicited under a bona fide solicitation meeting the requirements of
paragraph (d)(6)(iii)(A) of Section 1.148-5 of the Regulations and that do not
have a material financial interest in the issue. A lead underwriter in a negotiated
underwriting transaction is deemed to have a material financial interest in the
issue until 15 days after the issue date of the issue. In addition, any entity acting
as a financial advisor with respect to the purchase of the investment at the time
the bid specifications are forwarded to potential providers has a material financial
interest in the issue. A provider that is a related party to a provider that has a
material financial interest in the issue is deemed to have a material financial
interest in the issue.
(2)At least one of the three bids described in paragraph
(d)(6)(iii)(B)(1) of Section 1.148-5 of the Regulations is from a reasonably
competitive provider, within the meaning of paragraph (d)(6)(iii)(A)(7) of Section
1.148-5 of the Regulations.
(3)If the Issuer uses an agent to conduct the bidding process, the agent
did not bid to provide the investment.
(c)The winning bid meets the following requirements:
(1)Guaranteed investment contracts. If the investment is a guaranteed
investment contract, the winning bid is the highest yielding bona fide bid
(determined net of any broker's fees).
(2)Other investments. If the investment is not a guaranteed
investment contract, the winning bid is the lowest cost bona fide bid (including
any broker's fees).
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(d)The provider of the investments or the obligor on the guaranteed
investment contract certifies the administrative costs that it pays (or expects to pay, if
any) to third parties in connection with supplying the investment.
(e)The Issuer will retain the following records with the bond documents until
three years after the last outstanding bond is redeemed:
(1)For purchases of guaranteed investment contracts, a copy of the
contract, and for purchases of investments other than guaranteed investment
contracts, the purchase agreement or confirmation.
(2)The receipt or other record of the amount actually paid by the
Issuer for the investments, including a record of any administrative costs paid by
the Issuer, and the certification under paragraph (d)(6)(iii)(D) of Section 1.148-5
of the Regulations.
(3)For each bid that is submitted, the name of the person and entity
submitting the bid, the time and date of the bid, and the bid results.
(4)The bid solicitation form and, if the terms of the purchase
agreement or the guaranteed investment contract deviated from the bid solicitation
form or a submitted bid is modified, a brief statement explaining the deviation and
stating the purpose for the deviation.
(5)For purchases of investments other than guaranteed investment
contracts, the cost of the most efficient portfolio of State and Local Government
Series Securities, determined at the time that the bids were required to be
submitted pursuant to the terms of the bid specifications.
Section 4.5 Records
The Issuer will maintain records of all purchases, sales, liquidations, investments,
reinvestments, redemptions, disbursements, deposits, and transfers of amounts on deposit.
Section 4.6 Investments to be Legal
All investments required to be made pursuant to this Certificate shall be made to the
extent permitted by law. In the event that any such investment is determined to be ultra vires, it
shall be liquidated and the proceeds thereof shall be invested in a legal investment, provided that
prior to reinvesting such proceeds, the Issuer shall obtain an opinion of Bond Counsel to the
effect that such reinvestment will not cause the Bonds to become arbitrage bonds under Sections
103, 148, 149, or any other applicable provision of the Code.
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ARTICLE V
GENERAL COVENANTS
The Issuer hereby covenants to perform all acts within its power necessary to ensure that
the reasonable expectations set forth in Article II hereof will be realized. The Issuer reasonably
expects to comply with all covenants contained in this Certificate.
ARTICLE VI
AMENDMENTS AND ADDITIONAL AGREEMENTS
Section 6.1 Opinion of Bond Counsel; Amendments
The various provisions of this Certificate need not be observed and this Certificate may
be amended or supplemented at any time by the Issuer if the Issuer receives an opinion or
opinions of Bond Counsel that the failure to comply with such provisions will not cause any of
the Bonds to become "arbitrage bonds" under the Code and that the terms of such amendment or
supplement will not cause any of the Bonds to become "arbitrage bonds" under the Code, or
otherwise cause interest on any of the Bonds to become includable in gross income for federal
income tax purposes.
Section 6.2 Additional Covenants, Agreements
The Issuer hereby covenants to make, execute and enter into (and to take such actions, if
any, as may be necessary to enable it to do so) such agreements as may be necessary to comply
with any changes in law or regulations in order to preserve the tax-exempt status of the Bonds to
the extent that it may lawfully do so. The Issuer further covenants (1) to impose such limitations
on the investment or use of moneys or investments related to the Bonds, (2) to make such
payments to the United States Treasury, (3) to maintain such records, (4) to perform such
calculations, and (5) to perform such other lawful acts as may be necessary to preserve the tax-
exempt status of the Bonds.
Section 6.3 Internal Revenue Service Audits
The Internal Revenue Service has not audited the Issuer regarding any obligations issued
by or on behalf of the Issuer. To the best knowledge of the Issuer, no such obligations of the
Issuer are currently under examination by the Internal Revenue Service.
Section 6.4 Amendments
Except as otherwise provided in Section 6.1 hereof, all the rights, powers, duties and
obligations of the Issuer shall be irrevocable and binding upon the Issuer and shall not be subject
to amendment or modification by the Issuer.
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IN WITNESS WHEREOF, the Issuer has caused this Certificate to be executed by its
duly authorized officer, all as of the day first above written.
___________________________________
Director of Finance, City of Waukee, State of
Iowa
(SEAL)
EXHIBIT "A"
VERIFICATION CERTIFICATE OF THE PURCHASER
The undersigned officer of the Iowa Finance Authority (the "Purchaser"), hereby certifies
as follows:
1. The Purchaser and the City of Waukee, Iowa (the "Issuer"), have entered into a Loan
and Disbursement Agreement (the "Agreement"), providing for the purchase of a $7,000,000
Water Revenue Capital Loan Notes, Series 2025 of the City dated as of the date of delivery (the
"Notes").
2. The Agreement is in full force and effect and has not been repealed, rescinded or
amended.
3. The Purchaser hereby confirms that the Notes were purchased at par and will not be
reoffered to the public, the terms of purchase being as follows:
Principal
Amount
Issued
Principal
Amount
Sold
Interest
Rate
Price (% of par) (do not
include accrued interest)
$7,000,000 None 3.01%100%
IN WITNESS WHEREOF, the Purchaser has caused this Verification Certificate to be
executed by its duly authorized officer this __________ day of _______________, 2025.
IOWA FINANCE AUTHORITY
By: ________________________________
Its:
4925-6528-3959-1\21938-379