PRELIMINARY OFFICIAL STATEMENT DATED MAY 21, 2018

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1 PRELIMINARY OFFICIAL STATEMENT DATED MAY 21, 2018 This cover page contains information for quick reference only. It is not a summary of this issue. Investors must read the entire official statement to obtain information essential to the making of an informed investment decision. NEW ISSUE - BOOK ENTRY ONLY BANK QUALIFIED TAX MATTERS: Federal: 2018A Tax Exempt 2018B Tax Exempt See TAX EXEMPTION AND RELATED TAX MATTERS herein. State: 2018A Taxable 2018B Tax Exempt RATING (See Bond Rating herein): Moody s Investor Services Rating: In the opinion of Dorsey & Whitney LLP, Bond Counsel, according to present laws, rulings and decisions and assuming compliance with certain covenants, the interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining adjusted current earnings. The interest on the Series 2018B Bonds is exempt from the taxes imposed by Division II (Personal Net Income Tax) and Division III (Business Tax on Corporations) of Chapter 422 of the Code of Iowa, as amended. In the opinion of Bond Counsel, the Bonds are qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Internal Revenue Code of See TAX EXEMPTION AND RELATED TAX MATTERS herein. LINN COUNTY, IOWA $5,620,000 * GENERAL OBLIGATION LAND AND WATER LEGACY BONDS, SERIES 2018A AND $1,575,000 * GENERAL OBLIGATION URBAN RENEWAL ECONOMIC DEVELOPMENT BONDS, SERIES 2018B Dated: June 26, 2018 Due: June 1, as shown on the inside cover The General Obligation Land and Water Legacy Bonds, Series 2018A (the Series 2018A Bonds ) are being issued pursuant to the provisions of Chapter 331 of the Code of Iowa, 2017 as amended. Proceeds from the Series 2018A Bonds will be used to finance various water quality and land protection, park improvements and trails and to pay costs associated with issuance of the Series 2018A Bonds. See AUTHORITY AND PURPOSE herein. The General Obligation Urban Renewal Economic Development Bonds, Series 2018B (the Series 2018B Bonds ) are being issued pursuant to Sections , and of the Code of Iowa and Chapter 403. Proceeds from the Series 2018B Bonds will be used to finance a project in the Prospect Meadows Urban Renewal Area, consisting of an economic development grant to Prospect Meadows, Inc. in connection with the development of a baseball and softball complex and to pay costs associated with issuance of the Series 2018B Bonds. See AUTHORITY AND PURPOSE herein. Interest on the Series 2018B Bonds is exempt from the taxes imposed by Division II (Personal Net Income Tax) and Division III (Business Tax on Corporations) of Chapter 422 of the Code of Iowa, as amended. See TAX EXEMPTION AND RELATED TAX MATERS herein. The Series 2018A Bonds and Series 2018B Bonds maturing on June 1, 2026 and thereafter are subject to redemption, in whole or in part, on June 1, 2025 and on any date thereafter at a price of par plus accrued interest. The Series 2018A Bonds and Series 2018B Bonds and the interest thereon are general obligations of Linn County, Iowa, and all taxable property within the boundaries of the Issuer is subject to the levy of taxes to pay the principal of and interest on the Bonds without constitutional or statutory limitation as to rate or amount. See SECURITY/SOURCES AND USES OF FUNDS herein. Interest due with respect to the Series 2018A Bonds and Series 2018B Bonds is payable semiannually June 1 and December 1, commencing June 1, The Series 2018A Bonds and Series 2018B Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York. See DESCRIPTION OF THE BONDS Book-Entry System herein for additional information. The Paying Agent/Registrar will be Bankers Trust Company, Des Moines, Iowa. The Series 2018A Bonds and Series 2018B Bonds will be available for delivery at DTC on or about June 26, 2018 SALE DATE: JUNE 5, 2018 SALE TIME: 12:00 P.M. CT * Preliminary, subject to change. The County reserves the right, after bids are opened and prior to the award, to increase or reduce the principal amount of the individual serial or term maturities of the Bonds. Any such increase or reduction will be made in multiples of $5,000 within any of the maturities. If any maturity is adjusted, the purchase price will also be adjusted to maintain the same gross spread per $1,000.

2 MATURITIES, AMOUNTS, INTEREST RATES, YIELDS AND CUSIP NUMBERS SERIES 2018A BONDS Maturity Principal Interest CUSIP No. (1) Maturity Principal Interest CUSIP No. (1) (June 1) Amount* Rate Yield (535783) (June 1) Amount* Rate Yield (535783) 2019 $235, $275, , , , , , , , , , , , , , , , , , ,000 SERIES 2018B BONDS Maturity Principal Interest CUSIP No. (1) Maturity Principal Interest CUSIP No. (1) (June 1) Amount* Rate Yield (535783) (June 1) Amount* Rate Yield (535783) 2019 $90, $105, , , , , , , , , , , , , ,000 (1) CUSIP numbers are included solely for the convenience of the purchasers of the Bonds. CUSIP data herein is provided by CUSIP Global Services LLC, managed on behalf of the American Bankers Association by Standard & Poor s, a division of The McGraw-Hill Companies, Inc. No representations are made as to the correctness of the CUSIP numbers. These CUSIP numbers may also be subject to change after the issuance of the Bonds. * Principal subject to change LINN COUNTY, IOWA Board of Supervisors Name Position Term Expires John Harris Chairperson December 31, 2018 James Houser Vice Chairperson December 31, 2018 Brent Oleson Board of Supervisors December 31, 2018 Ben Rogers Board of Supervisors December 31, 2018 Stacey Walker Board of Supervisors December 31, 2018 APPOINTED OFFICIALS Steve Tucker, County Finance Director Dawn Jindrich, County Budget Director BOND COUNSEL Dorsey & Whitney, LLP Des Moines, Iowa MUNICIPAL ADVISOR Robert W. Baird & Co., Inc. Milwaukee, Wisconsin and Saint Paul, Minnesota

3 No dealer, broker, salesman or other person has been authorized to give any information or to make any representations, other than those contained in this Official Statement in connection with the offering contained herein, and if given or made, such other information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information contained in this Official Statement has been obtained from representatives of the County, public documents, records and other sources considered to be reliable. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guaranty the accuracy or completeness of such information. The delivery of this Official Statement at any time does not imply that any information herein is correct as of any time subsequent to its date. Any statements in this Official Statement involving estimates, assumptions and matters of opinion, whether or not so expressly stated, are intended as such and not representations of fact. This Official Statement should be considered in its entirety and no one factor considered less important than any other by reason of its position in this Official Statement. Where statutes, resolutions, reports or other documents are referred to herein, reference should be made to such statutes, resolutions, reports or other documents for more complete information regarding the rights and obligations of parties thereto, facts and opinions contained therein and the subject matter thereof. Upon issuance, the Bonds will not be registered under the Securities Act of 1933, as amended, and will not be listed on any stock or other securities exchange and neither the Securities and Exchange Commission nor any other Federal, State, Municipal or other governmental entity, other than the County, shall have passed upon the accuracy or adequacy of this Official Statement. (Remainder of page left intentionally blank)

4 TABLE OF CONTENTS SERIES 2018A BONDS SUMMARY AND TERMS OF OFFERING... 1 SERIES 2018B BONDS SUMMARY AND TERMS OF OFFERING... 7 INTRODUCTION AUTHORITY AND PURPOSE SECURITY/SOURCES AND USES OF FUNDS DESCRIPTION OF THE BONDS BONDHOLDERS RISK CONTINUING DISCLOSURE UNDERWRITING MUNICIPAL ADVISOR FUTURE FINANCING BOND RATING LITIGATION STATEMENT OF NO DEFAULT LEGALITY TAX EXEMPTION AND RELATED TAX MATTERS COUNTY GENERAL INFORMATION IOWA PROPERTY VALUATIONS ECONOMIC AND FINANCIAL INFORMATION SUMMARY OF DEBT AND DEBT STATISTICS APPENDIX A APPENDIX B APPENDIX C APPENDIX D APPENDIX E FORM OF BOND COUNSEL OPINION FORM OF CONTINUING DISCLOSURE CERTIFICATE AUDITED FINANCIAL STATEMENTS SERIES 2018A BONDS OFFICIAL NOTICE OF SALE AND BID FORM SERIES 2018B BONDS OFFICIAL NOTICE OF SALE AND BID FORM i

5 $5,620,000 * GENERAL OBLIGATION LAND AND WATER LEGACY BONDS, SERIES 2018A Amount*: $5,620,000 LINN COUNTY, IOWA SERIES 2018A BONDS SUMMARY AND TERMS OF OFFERING Issuer: Purchase Date: Municipal Advisor: Underwriter: Type of Issue: Linn County, Iowa Tuesday, June 5, 2018 at 12:00 P.M. CST Robert W. Baird & Co., (the Municipal Advisor ) Milwaukee, WI and St. Paul, MN, (the Series 2018A Underwriter ) General Obligation Land and Water Legacy Bonds, Series 2018A (the Series 2018A Bonds ). See AUTHORITY AND PURPOSE as well as SECURITY/SOURCES AND USES OF FUNDS herein for additional information Authority/Purpose The Series 2018A Bonds are being issued pursuant to the provisions of Chapter 331 of the Code of Iowa, 2017, as amended, a ballot measure approved by 74% of the votes of the County on November 8, 2016 and a resolution expected to be adopted by the Issuer on June 13, Proceeds from the Series 2018A Bonds will be used to finance various water quality and land protection, park improvements and trails and to pay costs associated with issuance of the Series 2018A Bonds. See AUTHORITY AND PURPOSE herein. Security: Tax Designations: The Series 2018A Bonds and the interest thereon are general obligations of the Issuer, and all taxable property within the boundaries of the Issuer is subject to the levy of taxes to pay the principal of and interest on the Series 2018A Bonds without constitutional or statutory limitation as to rate or amount. See SECURITY / SOURCES AND USES OF FUNDS herein NOT Private Activity Bonds - Bonds are not private activity bonds as defined in Section 141 of the Internal Revenue Code of 1986, as amended (the Code). Qualified Tax-Exempt Obligations The County will designate these Bonds as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Code. Bond Counsel: Paying Agent/Registrar: Bond Rating: Dorsey & Whitney, LLP Des Moines, Iowa Bankers Trust Company, Des Moines, Iowa The County has applied for an underlying bond rating from Moody s Investor Services. Closing: June 26, 2018 Primary Contacts: Steve Tucker, County Finance Director, Linn County, IA Paul Donna, Managing Director, Robert W. Baird * Preliminary, subject to change. The County reserves the right, after bids are opened and prior to the award, to increase or reduce the principal amount of the individual serial or term maturities of the Bonds. Any such increase or reduction will be made in multiples of $5,000 within any of the maturities. If any maturity is adjusted, the purchase price will also be adjusted to maintain the same gross spread per $1,000.

6 TERMS OF OFFERING Bids for the purchase of Linn County, Iowa s $5,620,000 * General Obligation Land & Water Legacy Bonds, Series 2018A (the Series 2018A Bonds ) will be received on Tuesday, June 5, 2018 before 12:00 P.M., Central Time, after which time they will be tabulated. The County Board of Supervisors will consider award of the Bonds at 9:00 A.M., Central Time, on Wednesday, June 6, Questions regarding the sale of the Bonds should be directed to the County s Municipal Advisor, Robert W. Baird & Co., Inc. (the Municipal Advisor ), 752 Stillwater Road, Suite J, Saint Paul, MN or by telephoning Information can also be obtained from Mr. Steve Tucker, Finance Director, nd Street SW, Cedar Rapids, IA or by telephoning In addition to the provisions of the NOTICE OF SALE, this section sets forth the description of certain terms of the Series 2018A Bonds as well as the TERMS OF OFFERING with which all bidders and bid proposals are required to comply. DETAILS OF THE SERIES 2018A BONDS GENERAL OBLIGATION LAND & WATER LEGACY BONDS, SERIES 2018A, in the principal amount of $5,620,000* to be dated the date of delivery (anticipated to be June 26, 2018) in the denomination of $5,000 or multiples thereof, will mature on June 1 as follows: Year Amount* Year Amount* 2019 $235, $275, , , , , , , , , , , , , , , , , , ,000 * Preliminary; subject to change. ADJUSTMENT TO BOND MATURITY AMOUNTS The County reserves the right to increase or decrease the aggregate principal amount of the Bonds and to increase or reduce each scheduled maturity thereof after the determination of the successful bidder. The County may increase or decrease each maturity in increments of $5,000 but the total amount to be issued will not exceed $6,000,000. Interest rates specified by the successful bidder for each maturity will not change. Final adjustments shall be in the sole discretion of the County. The dollar amount of the purchase price proposed by the successful bidder will be changed if the aggregate principal amount of the Bonds is adjusted as described above. Any change in the principal amount of any maturity of the Bonds will be made while maintaining, as closely as possible, the successful bidder's net compensation, calculated as a percentage of bond principal. The successful bidder may not withdraw or modify its bid as a result of any post-bid adjustment. Any adjustment shall be conclusive, and shall be binding upon the successful bidder. TERM BOND OPTION Bidders shall have the option of designating the Bonds as serial bonds or term bonds, or both. The bid must designate whether each of the principal amounts shown above represent a serial maturity or a mandatory redemption * Preliminary, subject to change 2

7 requirement for a term bond maturity. (See the OFFICIAL BID FORM for more information.) In any event, the above principal amount scheduled shall be represented by either serial bond maturities or mandatory redemption requirements, or a combination of both. OPTIONAL REDEMPTION Series 2018A Bonds due after June 1, 2025 will be subject to call prior to maturity in whole, or from time to time in part, in any order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the County, upon terms of par plus accrued interest to date of call. Written notice of such call shall be given at least thirty (30) days prior to the date fixed for redemption to the registered owners of the Series 2018A Bonds to be redeemed at the address shown on the registration books. INTEREST Interest on the Series 2018A Bonds will be payable on June 1, 2019 and semiannually on the 1st day of June and December thereafter. Interest and principal shall be paid to the registered holder of a bond as shown on the records of ownership maintained by the Registrar at the close of business on the 15th day of the month next preceding the interest payment date (the Record Date ). Interest will be computed on the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the Municipal Securities Rulemaking Board. GOOD FAITH DEPOSIT A good faith deposit in the amount of $56,200 (the Deposit ) is required from the lowest bidder only. The lowest bidder is required to submit such Deposit payable to the order of the County, not later than 4:00 P.M., Central Time, on the day bids are received on the Series 2018A Bonds and in the form of either (i) a cashier s check provided to the County or its Municipal Advisor or (ii) a wire transfer as instructed by the County s Municipal Advisor. If not so received, the bid of the lowest bidder may be rejected and the County may direct the second lowest bidder to submit a Deposit and thereafter may award the sale of the Series 2018A Bonds to the same. No interest on a Deposit will accrue to the successful bidder (the Purchaser ). The Deposit will be applied to the purchase price of the Series 2018A Bonds. In the event a Purchaser fails to honor its accepted bid proposal, the Deposit will be retained by the County. FORM OF BIDS AND AWARD All bids shall be unconditional for the Series 2018A Bonds for a price not less than $5,563,800, plus accrued interest, and shall specify the rate or rates of interest in conformity to the limitations set forth under the BIDDING PARAMETERS section. Bids must be submitted on or in substantial compliance with the OFFICIAL BID FORM provided by the County. The Bonds will be awarded to the bidder offering the lowest interest rate to be determined on a true interest cost (the TIC ) basis assuming compliance with the ESTABLISHMENT OF ISSUE PRICE and GOOD FAITH DEPOSIT sections. The TIC shall be determined by the present value method, i.e., by ascertaining the semiannual rate, compounded semiannually, necessary to discount to present value as of the dated date of the Bonds, the amount payable on each interest payment date and on each stated maturity date or earlier mandatory redemption, so that the aggregate of such amounts will equal the aggregate purchase price offered therefore. The TIC shall be stated in terms of an annual percentage rate and shall be that rate of interest, which is twice the semiannual rate so ascertained (also known as the Canadian Method). The TIC shall be as determined by the Municipal Advisor based on the NOTICE OF SALE, TERMS OF OFFERING and all amendments, and on the bids as submitted. The Municipal Advisor s computation of the TIC of each bid shall be controlling. In the event of tie bids for the lowest TIC, the Bonds will be awarded by lot. The County will reserve the right to: (i) waive non-substantive informalities of any bid or of matters relating to the receipt of bids and award of the Bonds, (ii) reject all bids without cause and (iii) reject any bid which the County determines to have failed to comply with the terms herein. BIDDING PARAMETERS Each bidder s proposal must conform to the following limitations: 3

8 1. Each annual maturity must bear a single rate of interest from the dated date of the Bonds to the date of maturity. 2. Rates of interest bid must be in multiples of one-eighth or one-twentieth of one percent. 3. The initial price to the public for each maturity must be 98% or greater. RECEIPT OF BIDS Forms of Bids: Bids must be submitted to Baird either (1) at Robert W. Baird & Co. Incorporated, 25th Floor, 777 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202, Attention: Katherine Voss, Assistant Vice President, (2) faxed to Baird at (414) , or (3) submitted electronically via PARITY in accordance with this TERMS OF OFFERING and the NOTICE OF SALE, but no bids will be received after the time established above for the opening of bids. If any provisions are conflicting with any instructions or directions set forth in PARITY, this TERMS OF OFFERING shall control. The normal fee for use of PARITY may be obtained from PARITY, and such fee shall be the responsibility of the bidder. For further information about PARITY, potential bidders may contact Baird, 25th Floor, 777 East Wisconsin Avenue, Milwaukee, Wisconsin or PARITY, c/o i-deal LLC, 1359 Broadway, 2nd Floor, New York, New York 10018, telephone (212) The County and Robert W. Baird & Co. Incorporated assume no responsibility or liability for bids submitted through PARITY. Each bidder shall be solely responsible for making necessary arrangements to access PARITY for purposes of submitting its electronic bid in a timely manner and in compliance with the requirements of the TERMS OF OFFERING and NOTICE OF SALE. Neither the County, its agents nor PARITY shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder, and neither the County, its agents nor PARITY shall be responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or have any liability for any delays or interruptions of or any damages caused by the services of PARITY. The County is using the services of PARITY solely as a communication mechanism to conduct the electronic bidding for the Bonds, and PARITY is not an agent of the County. The County may regard the electronic transmission of the bid via the electronic service (including information about the purchase price for the Bonds and interest rate or rates to be borne by the Bonds and any other information included in such transmission) as though the same information were submitted on the bid form and executed on behalf of the bidder by a duly authorized signatory. If the bid is accepted by the County, the terms of the OFFICIAL BID FORM, TERMS OF OFFERING and NOTICE OF SALE and the information transmitted though the electronic service shall form a contract, and the bidder shall be bound by the terms of such contract. For information purposes only, bidders are requested to state in their electronic bids the true interest cost to the County, as described in the TERMS OF OFFERING, NOTICE OF SALE and in the written form OFFICIAL BID FORM. All electronic bids shall be deemed to incorporate the provisions of the TERMS OF OFFERING, NOTICE OF SALE and in the written form OFFICIAL BID FORM. Electronic facsimile bids received after the deadline will be rejected. Bidders electing to submit bids via electronic facsimile transmission bear full responsibility for the transmission of such bid. Neither the County nor its agents shall be responsible for any malfunction or mistake made by any person, or as a result of the use of the electronic facsimile facilities or any other means used to deliver or complete a bid. The use of such facilities or means is at the sole risk of the prospective bidder who shall be bound by the terms of the bid as received. Neither the County nor its agents will assume liability for the inability of the bidder to reach the above named fax number prior to the time of sale specified above. Time of receipt shall be the time recorded by the facsimile operator receiving the bids. BOOK-ENTRY-ONLY ISSUANCE The Bonds will be issued by means of a book-entry-only system with no physical distribution of bond certificates made to the public. The Bonds will be issued in fully registered form and one bond certificate, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ( DTC ), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the Registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and 4

9 interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The Purchaser, as a condition of delivery of the Bonds, will be required to deposit the bond certificates with DTC. DELIVERY The Bonds will be delivered in printed form, one Bond per maturity, registered in the name of CEDE & CO., as nominee of The Depository Trust Company, securities depository of the Bonds for the establishment of book-entry accounts at the direction of the successful bidder, within approximately forty-five (45) days after the award. Payment at the time of delivery must be made in federal or other immediately available funds. In the event delivery is not made within forty-five (45) days after the date of the sale of the Bonds, the successful bidder may, prior to tender of the Bonds, at its option, be relieved of its obligation under the contract to purchase the Bonds and its good faith deposit shall be returned, but no interest shall be allowed thereon. ESTABLISHMENT OF ISSUE PRICE In order to establish the issue price of the Bonds for federal income tax purposes, the County requires bidders to agree to the following, and by submitting a bid, each bidder agrees to the following. If a bid is submitted by a potential underwriter, the bidder confirms that (i) the underwriters have offered or reasonably expect to offer the Bonds to the public on or before the date of the award at the offering price (the initial offering price ) for each maturity as set forth in the bid and (ii) the bidder, if it is the winning bidder, shall require any agreement among underwriters, selling group agreement, retail distribution agreement or other agreement relating to the initial sale of the Bonds to the public to which it is a party to include provisions requiring compliance by all parties to such agreements with the provisions contained herein. For purposes hereof, Bonds with a separate CUSIP number constitute a separate maturity, and the public does not include underwriters of the Bonds (including members of a selling group or retail distribution group) or persons related to underwriters of the Bonds. If, however, a bid is submitted for the bidder s own account in a capacity other than as an underwriter of the Bonds, and the bidder has no current intention to sell, reoffer, or otherwise dispose of the Bonds, the bidder shall notify the County to that effect at the time it submits its bid and shall provide a certificate to that effect in place of the certificate otherwise required below. If the winning bidder intends to act as an underwriter, the County shall advise the winning bidder at or prior to the time of award whether (i) the competitive sale rule or (ii) the hold-the-offering price rule applies. If the County advises the Purchaser that the requirements for a competitive sale have been satisfied and that the competitive sale rule applies, the Purchaser will be required to deliver to the County at or prior to closing a certification, substantially in the form attached hereto as EXHIBIT 1-A, as to the reasonably expected initial offering price as of the award date. If the County advises the Purchaser that the requirements for a competitive sale have not been satisfied and that the hold-the-offering price rule applies, the Purchaser shall (1) upon the request of the County confirm that the underwriters did not offer or sell any maturity of the Bonds to any person at a price higher than the initial offering price of that maturity during the period starting on the award date and ending on the earlier of (a) the close of the fifth business day after the sale date or (b) the date on which the underwriters have sold at least 10% of that maturity to the public at or below the initial offering price; and (2) at or prior to closing, deliver to the County a certification substantially in the form attached hereto as EXHIBIT 1-B, together with a copy of the pricing wire. Any action to be taken or documentation to be received by the County pursuant hereto may be taken or received on behalf of the County by its Municipal Advisor. Bidders should prepare their bids on the assumption the Bonds will be subject to the hold-the-offeringprice rule. Any bid submitted pursuant to the TERMS OF OFFERING and OFFICIAL BID FORM shall be considered a firm offer for the purchase of the Bonds, and bids submitted will not be subject to cancellation or withdrawal. 5

10 OFFICIAL STATEMENT The County has authorized the preparation of a Preliminary Official Statement containing pertinent information relative to the Bonds. The Preliminary Official Statement, when further supplemented with offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, anticipated delivery date and the identity of the underwriters together with any other information required by law or deemed appropriate by the County, shall constitute a final Official Statement of the County with respect to the Bonds, as that term is defined in Rule 15c2-12 promulgated by the Securities and Exchange Commission (the SEC ) under the Securities Exchange Act of 1934, as amended (the Rule ). By awarding the Bonds to any underwriter or underwriting syndicate submitting an OFFICIAL BID FORM, therefore, the County agrees that no more than seven (7) business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded up to 25 copies of the final Official Statement to permit each Participating Underwriter (as that term is defined in the Rule) to comply with the provisions of such Rule. The County shall treat the senior managing underwriter of the syndicate to which the Bonds are awarded as its designated agent for purposes of distributing copies of the final Official Statement to the Participating Underwriter. Any underwriter executing and delivering an OFFICIAL BID FORM, with respect to the Bonds, agrees thereby, that if its bid is accepted by the County, (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the final Official Statement. CONTINUING DISCLOSURE In order to permit bidders for the Bonds and other Participating Underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of the Rule, the County will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds, in the resolution for the Bonds and the Continuing Disclosure Certificate, to provide annual financial information filings of specified information and notice of the occurrence of certain material events as hereinafter described (the Undertakings ). The information to be provided on an annual basis, the events as to which notice is to be given, and a summary of other provisions of the Undertakings, including termination, amendment and remedies, are set forth as APPENDIX C to this Preliminary Official Statement. During the past five years, the County did not file their audited financial statements for fiscal year 2011 for the general obligation bonds, Series 2009, 2010A and 2010B in a timely manner. Breach of the Undertakings will not constitute a default or an Event of Default under the Bonds or the resolution for the Bonds. A broker or dealer is to consider a known breach of the Undertakings, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the County to observe the Undertakings may adversely affect the transferability and liquidity of the Bonds and their market price. CUSIP NUMBERS It is anticipated that the Committee on Uniform Security Identification Procedures ( CUSIP ) numbers will be printed on the Bonds and the Purchaser must agree in the bid proposal to pay the cost thereof. In no event will the County, Bond Counsel or Municipal Advisor be responsible for the review or express any opinion that the CUSIP numbers are correct. Incorrect CUSIP numbers on said Bonds shall not be cause for the Purchaser to refuse to accept delivery of said Bonds. BY ORDER OF THE COUNTY BOARD OF SUPERVISORS Linn County, Iowa /s/ Steve Tucker, Finance Director 6

11 $1,575,000 * GENERAL OBLIGATION URBAN RENEWAL ECONOMIC DEVELOPMENT BONDS, SERIES 2018B Amount*: $1,575,000 LINN COUNTY, IOWA SERIES 2018B BONDS SUMMARY AND TERMS OF OFFERING Issuer: Purchase Date: Municipal Advisor: Underwriter: Type of Issue: Authority/Purpose Security: Tax Designations: Linn County, Iowa Tuesday, June 5, 2018 at 12:00 P.M. CST Robert W. Baird & Co., (the Municipal Advisor ) Milwaukee, WI and St. Paul, MN, (the Series 2018B Underwriter ) General Obligation Urban Renewal Economic Development Bonds, Series 2018B (the Series 2018B Bonds ). See AUTHORITY AND PURPOSE as well as SECURITY/SOURCES AND USES OF FUNDS herein for additional information. The Bonds are being issued pursuant Sections , and of the Code of Iowa, Chapter 403 and a resolution expected to be adopted by the Issuer on June 13, Proceeds from the Series 2018B Bonds will be used to finance a project in the Prospect Meadows Urban Renewal Area, consisting of an economic development grant to Prospect Meadows, Inc. in connection with the development of a baseball and softball complex and to pay costs associated with issuance of the Series 2018B Bonds. See AUTHORITY AND PURPOSE herein. The Series 2018B Bonds and the interest thereon are general obligations of the Issuer, and all taxable property within the boundaries of the Issuer is subject to the levy of taxes to pay the principal of and interest on the Series 2018B Bonds without constitutional or statutory limitation as to rate or amount. See SECURITY / SOURCES AND USES OF FUNDS herein NOT Private Activity Bonds - Bonds are not private activity bonds as defined in Section 141 of the Internal Revenue Code of 1986, as amended (the Code). Qualified Tax-Exempt Obligations The County will designate these Bonds as qualified tax-exempt obligations for purposes of Section 265(b)(3) of the Code. Bond Counsel: Paying Agent/Registrar: Bond Rating: Dorsey & Whitney, LLP Des Moines, Iowa Bankers Trust Company, Des Moines, Iowa The County has applied for an underlying bond rating from Moody s Investor Services. Closing: June 26, 2018 Primary Contacts: Steve Tucker, County Finance Director, Linn County, IA Paul Donna, Managing Director, Robert W. Baird * Preliminary, subject to change. The County reserves the right, after bids are opened and prior to the award, to increase or reduce the principal amount of the individual serial or term maturities of the Bonds. Any such increase or reduction will be made in multiples of $5,000 within any of the maturities. If any maturity is adjusted, the purchase price will also be adjusted to maintain the same gross spread per $1,000. 7

12 TERMS OF OFFERING Bids for the purchase of Linn County, Iowa s $1,575,000 * General Obligation Urban Renewal Economic Development Bonds, Series 2018B (the Series 2018B Bonds ) will be received on Tuesday, June 5, 2018 before 12:00 P.M., Central Time, after which time they will be tabulated. The County Board of Supervisors will consider award of the Bonds at 9:00 A.M., Central Time, on Wednesday, June 6, Questions regarding the sale of the Bonds should be directed to the County s Municipal Advisor, Robert W. Baird & Co., Inc. (the Municipal Advisor ), 752 Stillwater Road, Suite J, Saint Paul, MN or by telephoning Information can also be obtained from Mr. Steve Tucker, Finance Director, nd Street SW, Cedar Rapids, IA or by telephoning In addition to the provisions of the NOTICE OF SALE, this section sets forth the description of certain terms of the Series 2018B Bonds as well as the TERMS OF OFFERING with which all bidders and bid proposals are required to comply. DETAILS OF THE SERIES 2018B BONDS GENERAL OBLIGATION URBAN RENEWAL ECONOMIC DEVELOPMENT BONDS, SERIES 2018B, in the principal amount of $1,575,000* to be dated the date of delivery (anticipated to be June 26, 2018) in the denomination of $5,000 or multiples thereof, will mature on June 1 as follows: Year Amount* Year Amount* 2019 $90, $105, , , , , , , , , , , , , ,000 * Preliminary; subject to change. ADJUSTMENT TO BOND MATURITY AMOUNTS The County reserves the right to decrease the aggregate principal amount of the Bonds and to increase or reduce each scheduled maturity thereof after the determination of the successful bidder. The County may decrease each maturity in increments of $5,000 but the total amount to be decreased will not exceed $200,000. Interest rates specified by the successful bidder for each maturity will not change. Final adjustments shall be in the sole discretion of the County. The dollar amount of the purchase price proposed by the successful bidder will be changed if the aggregate principal amount of the Bonds is adjusted as described above. Any change in the principal amount of any maturity of the Bonds will be made while maintaining, as closely as possible, the successful bidder's net compensation, calculated as a percentage of bond principal. The successful bidder may not withdraw or modify its bid as a result of any post-bid adjustment. Any adjustment shall be conclusive, and shall be binding upon the successful bidder. TERM BOND OPTION Bidders shall have the option of designating the Bonds as serial bonds or term bonds, or both. The bid must designate whether each of the principal amounts shown above represent a serial maturity or a mandatory redemption requirement for a term bond maturity. (See the OFFICIAL BID FORM for more information.) In any event, the above principal amount scheduled shall be represented by either serial bond maturities or mandatory redemption requirements, or a combination of both. * Preliminary, subject to change 8

13 OPTIONAL REDEMPTION Series 2018B Bonds due after June 1, 2025 will be subject to call prior to maturity in whole, or from time to time in part, in any order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the County, upon terms of par plus accrued interest to date of call. Written notice of such call shall be given at least thirty (30) days prior to the date fixed for redemption to the registered owners of the Series 2018B Bonds to be redeemed at the address shown on the registration books. INTEREST Interest on the Series 2018B Bonds will be payable on June 1, 2019 and semiannually on the 1st day of June and December thereafter. Interest and principal shall be paid to the registered holder of a bond as shown on the records of ownership maintained by the Registrar at the close of business on the 15th day of the month next preceding the interest payment date (the Record Date ). Interest will be computed on the basis of a 360-day year of twelve 30-day months and will be rounded pursuant to rules of the Municipal Securities Rulemaking Board. GOOD FAITH DEPOSIT A good faith deposit in the amount of $15,750 (the Deposit ) is required from the lowest bidder only. The lowest bidder is required to submit such Deposit payable to the order of the County, not later than 4:00 P.M., Central Time, on the day bids are received on the Series 2018B Bonds and in the form of either (i) a cashier s check provided to the County or its Municipal Advisor or (ii) a wire transfer as instructed by the County s Municipal Advisor. If not so received, the bid of the lowest bidder may be rejected and the County may direct the second lowest bidder to submit a Deposit and thereafter may award the sale of the Series 2018B Bonds to the same. No interest on a Deposit will accrue to the successful bidder (the Purchaser ). The Deposit will be applied to the purchase price of the Series 2018B Bonds. In the event a Purchaser fails to honor its accepted bid proposal, the Deposit will be retained by the County. FORM OF BIDS AND AWARD All bids shall be unconditional for the Series 2018B Bonds for a price not less than $1,559,250, plus accrued interest, and shall specify the rate or rates of interest in conformity to the limitations set forth under the BIDDING PARAMETERS section. Bids must be submitted on or in substantial compliance with the OFFICIAL BID FORM provided by the County. The Bonds will be awarded to the bidder offering the lowest interest rate to be determined on a true interest cost (the TIC ) basis assuming compliance with the ESTABLISHMENT OF ISSUE PRICE and GOOD FAITH DEPOSIT sections. The TIC shall be determined by the present value method, i.e., by ascertaining the semiannual rate, compounded semiannually, necessary to discount to present value as of the dated date of the Bonds, the amount payable on each interest payment date and on each stated maturity date or earlier mandatory redemption, so that the aggregate of such amounts will equal the aggregate purchase price offered therefore. The TIC shall be stated in terms of an annual percentage rate and shall be that rate of interest, which is twice the semiannual rate so ascertained (also known as the Canadian Method). The TIC shall be as determined by the Municipal Advisor based on the NOTICE OF SALE, TERMS OF OFFERING and all amendments, and on the bids as submitted. The Municipal Advisor s computation of the TIC of each bid shall be controlling. In the event of tie bids for the lowest TIC, the Bonds will be awarded by lot. The County will reserve the right to: (i) waive non-substantive informalities of any bid or of matters relating to the receipt of bids and award of the Bonds, (ii) reject all bids without cause and (iii) reject any bid which the County determines to have failed to comply with the terms herein. BIDDING PARAMETERS Each bidder s proposal must conform to the following limitations: 1. Each annual maturity must bear a single rate of interest from the dated date of the Bonds to the date of maturity. 2. Rates of interest bid must be in multiples of one-eighth or one-twentieth of one percent. 3. The initial price to the public for each maturity must be 98% or greater. 9

14 RECEIPT OF BIDS Forms of Bids: Bids must be submitted to Baird either (1) at Robert W. Baird & Co. Incorporated, 25th Floor, 777 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202, Attention: Katherine Voss, Assistant Vice President, (2) faxed to Baird at (414) , or (3) submitted electronically via PARITY in accordance with this TERMS OF OFFERING and the NOTICE OF SALE, but no bids will be received after the time established above for the opening of bids. If any provisions are conflicting with any instructions or directions set forth in PARITY, this TERMS OF OFFERING shall control. The normal fee for use of PARITY may be obtained from PARITY, and such fee shall be the responsibility of the bidder. For further information about PARITY, potential bidders may contact Baird, 25th Floor, 777 East Wisconsin Avenue, Milwaukee, Wisconsin or PARITY, c/o i-deal LLC, 1359 Broadway, 2nd Floor, New York, New York 10018, telephone (212) The County and Robert W. Baird & Co. Incorporated assume no responsibility or liability for bids submitted through PARITY. Each bidder shall be solely responsible for making necessary arrangements to access PARITY for purposes of submitting its electronic bid in a timely manner and in compliance with the requirements of the TERMS OF OFFERING and NOTICE OF SALE. Neither the County, its agents nor PARITY shall have any duty or obligation to undertake registration to bid for any prospective bidder or to provide or ensure electronic access to any qualified prospective bidder, and neither the County, its agents nor PARITY shall be responsible for a bidder's failure to register to bid or for any failure in the proper operation of, or have any liability for any delays or interruptions of or any damages caused by the services of PARITY. The County is using the services of PARITY solely as a communication mechanism to conduct the electronic bidding for the Bonds, and PARITY is not an agent of the County. The County may regard the electronic transmission of the bid via the electronic service (including information about the purchase price for the Bonds and interest rate or rates to be borne by the Bonds and any other information included in such transmission) as though the same information were submitted on the bid form and executed on behalf of the bidder by a duly authorized signatory. If the bid is accepted by the County, the terms of the OFFICIAL BID FORM, TERMS OF OFFERING and NOTICE OF SALE and the information transmitted though the electronic service shall form a contract, and the bidder shall be bound by the terms of such contract. For information purposes only, bidders are requested to state in their electronic bids the true interest cost to the County, as described in the TERMS OF OFFERING, NOTICE OF SALE and in the written form OFFICIAL BID FORM. All electronic bids shall be deemed to incorporate the provisions of the TERMS OF OFFERING, NOTICE OF SALE and in the written form OFFICIAL BID FORM. Electronic facsimile bids received after the deadline will be rejected. Bidders electing to submit bids via electronic facsimile transmission bear full responsibility for the transmission of such bid. Neither the County nor its agents shall be responsible for any malfunction or mistake made by any person, or as a result of the use of the electronic facsimile facilities or any other means used to deliver or complete a bid. The use of such facilities or means is at the sole risk of the prospective bidder who shall be bound by the terms of the bid as received. Neither the County nor its agents will assume liability for the inability of the bidder to reach the above named fax number prior to the time of sale specified above. Time of receipt shall be the time recorded by the facsimile operator receiving the bids. BOOK-ENTRY-ONLY ISSUANCE The Bonds will be issued by means of a book-entry-only system with no physical distribution of bond certificates made to the public. The Bonds will be issued in fully registered form and one bond certificate, representing the aggregate principal amount of the Bonds maturing in each year, will be registered in the name of Cede & Co. as nominee of The Depository Trust Company ( DTC ), New York, New York, which will act as securities depository of the Bonds. Individual purchases of the Bonds may be made in the principal amount of $5,000 or any multiple thereof of a single maturity through book entries made on the books and records of DTC and its participants. Principal and interest are payable by the Registrar to DTC or its nominee as registered owner of the Bonds. Transfer of principal and interest payments to participants of DTC will be the responsibility of DTC; transfer of principal and interest payments to beneficial owners by participants will be the responsibility of such participants and other nominees of beneficial owners. The Purchaser, as a condition of delivery of the Bonds, will be required to deposit the bond certificates with DTC. 10

15 DELIVERY The Bonds will be delivered in printed form, one Bond per maturity, registered in the name of CEDE & CO., as nominee of The Depository Trust Company, securities depository of the Bonds for the establishment of book-entry accounts at the direction of the successful bidder, within approximately forty-five (45) days after the award. Payment at the time of delivery must be made in federal or other immediately available funds. In the event delivery is not made within forty-five (45) days after the date of the sale of the Bonds, the successful bidder may, prior to tender of the Bonds, at its option, be relieved of its obligation under the contract to purchase the Bonds and its good faith deposit shall be returned, but no interest shall be allowed thereon. ESTABLISHMENT OF ISSUE PRICE In order to establish the issue price of the Bonds for federal income tax purposes, the County requires bidders to agree to the following, and by submitting a bid, each bidder agrees to the following. If a bid is submitted by a potential underwriter, the bidder confirms that (i) the underwriters have offered or reasonably expect to offer the Bonds to the public on or before the date of the award at the offering price (the initial offering price ) for each maturity as set forth in the bid and (ii) the bidder, if it is the winning bidder, shall require any agreement among underwriters, selling group agreement, retail distribution agreement or other agreement relating to the initial sale of the Bonds to the public to which it is a party to include provisions requiring compliance by all parties to such agreements with the provisions contained herein. For purposes hereof, Bonds with a separate CUSIP number constitute a separate maturity, and the public does not include underwriters of the Bonds (including members of a selling group or retail distribution group) or persons related to underwriters of the Bonds. If, however, a bid is submitted for the bidder s own account in a capacity other than as an underwriter of the Bonds, and the bidder has no current intention to sell, reoffer, or otherwise dispose of the Bonds, the bidder shall notify the County to that effect at the time it submits its bid and shall provide a certificate to that effect in place of the certificate otherwise required below. If the winning bidder intends to act as an underwriter, the County shall advise the winning bidder at or prior to the time of award whether (i) the competitive sale rule or (ii) the hold-the-offering price rule applies. If the County advises the Purchaser that the requirements for a competitive sale have been satisfied and that the competitive sale rule applies, the Purchaser will be required to deliver to the County at or prior to closing a certification, substantially in the form attached hereto as EXHIBIT 1-A, as to the reasonably expected initial offering price as of the award date. If the County advises the Purchaser that the requirements for a competitive sale have not been satisfied and that the hold-the-offering price rule applies, the Purchaser shall (1) upon the request of the County confirm that the underwriters did not offer or sell any maturity of the Bonds to any person at a price higher than the initial offering price of that maturity during the period starting on the award date and ending on the earlier of (a) the close of the fifth business day after the sale date or (b) the date on which the underwriters have sold at least 10% of that maturity to the public at or below the initial offering price; and (2) at or prior to closing, deliver to the County a certification substantially in the form attached hereto as EXHIBIT 1-B, together with a copy of the pricing wire. Any action to be taken or documentation to be received by the County pursuant hereto may be taken or received on behalf of the County by its Municipal Advisor. Bidders should prepare their bids on the assumption the Bonds will be subject to the hold-the-offeringprice rule. Any bid submitted pursuant to the TERMS OF OFFERING and OFFICIAL BID FORM shall be considered a firm offer for the purchase of the Bonds, and bids submitted will not be subject to cancellation or withdrawal. 11

16 OFFICIAL STATEMENT The County has authorized the preparation of a Preliminary Official Statement containing pertinent information relative to the Bonds. The Preliminary Official Statement, when further supplemented with offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, anticipated delivery date and the identity of the underwriters together with any other information required by law or deemed appropriate by the County, shall constitute a final Official Statement of the County with respect to the Bonds, as that term is defined in Rule 15c2-12 promulgated by the Securities and Exchange Commission (the SEC ) under the Securities Exchange Act of 1934, as amended (the Rule ). By awarding the Bonds to any underwriter or underwriting syndicate submitting an OFFICIAL BID FORM, therefore, the County agrees that no more than seven (7) business days after the date of such award, it shall provide without cost to the senior managing underwriter of the syndicate to which the Bonds are awarded up to 25 copies of the final Official Statement to permit each Participating Underwriter (as that term is defined in the Rule) to comply with the provisions of such Rule. The County shall treat the senior managing underwriter of the syndicate to which the Bonds are awarded as its designated agent for purposes of distributing copies of the final Official Statement to the Participating Underwriter. Any underwriter executing and delivering an OFFICIAL BID FORM, with respect to the Bonds, agrees thereby, that if its bid is accepted by the County, (i) it shall accept such designation and (ii) it shall enter into a contractual relationship with all Participating Underwriters of the Bonds for purposes of assuring the receipt by each such Participating Underwriter of the final Official Statement. CONTINUING DISCLOSURE In order to permit bidders for the Bonds and other Participating Underwriters in the primary offering of the Bonds to comply with paragraph (b)(5) of the Rule, the County will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds, in the resolution for the Bonds and the Continuing Disclosure Certificate, to provide annual financial information filings of specified information and notice of the occurrence of certain material events as hereinafter described (the Undertakings ). The information to be provided on an annual basis, the events as to which notice is to be given, and a summary of other provisions of the Undertakings, including termination, amendment and remedies, are set forth as APPENDIX C to this Preliminary Official Statement. During the past five years, the County did not file their audited financial statements for fiscal year 2011 for the general obligation bonds, Series 2009, 2010A and 2010B in a timely manner. Breach of the Undertakings will not constitute a default or an Event of Default under the Bonds or the resolution for the Bonds. A broker or dealer is to consider a known breach of the Undertakings, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the County to observe the Undertakings may adversely affect the transferability and liquidity of the Bonds and their market price. CUSIP NUMBERS It is anticipated that the Committee on Uniform Security Identification Procedures ( CUSIP ) numbers will be printed on the Bonds and the Purchaser must agree in the bid proposal to pay the cost thereof. In no event will the County, Bond Counsel or Municipal Advisor be responsible for the review or express any opinion that the CUSIP numbers are correct. Incorrect CUSIP numbers on said Bonds shall not be cause for the Purchaser to refuse to accept delivery of said Bonds. BY ORDER OF THE COUNTY BOARD OF SUPERVISORS Linn County, Iowa /s/ Steve Tucker, Finance Director ) 12

17 INTRODUCTION This Preliminary Official Statement contains information relating to Linn County, Iowa (the County ) and its issuance of General Obligation Land and Water Legacy Bonds, Series 2018A (the Series 2018A Bonds ) and General Obligation Urban Renewal Economic Development Bonds, Series 2018B (the Series 2018B Bonds ). The Series 2018A Bonds and the Series 2018B Bonds are referred to collectively herein as the Bonds. This Preliminary Official Statement has been executed on behalf of the County and its Finance Director and may be distributed in connection with the sale of the Bonds authorized therein. Inquiries may be made to Robert W. Baird & Co., Inc. (the Municipal Advisor ), 752 Stillwater Road, Suite J, Saint Paul, MN or by telephoning (651) Information can also be obtained from Mr. Steve Tucker, Finance Director, 935 2nd Street SW, Cedar Rapids, IA or by telephoning AUTHORITY AND PURPOSE The General Obligation Land and Water Legacy Bonds, Series 2018A are being issued pursuant to the provisions of Chapter 331 of the Code of Iowa, 2017 as amended and a ballot measure approved by 74% of the votes of the County on November 8, Proceeds from the Series 2018A Bonds will be used to finance various water quality and land protection, park improvements and trails and to pay costs associated with issuance of the Series 2018A Bonds. The General Obligation Urban Renewal Economic Development Bonds, Series 2018B are being issued pursuant to Sections , and of the Code of Iowa and Chapter 403. Proceeds from the Series 2018B Bonds will be used to finance a project in the Prospect Meadows Urban Renewal Area, consisting of an economic development grant to Prospect Meadows, Inc. in connection with the development of a baseball and softball complex and to pay costs associated with issuance of the Series 2018B Bonds. Security SECURITY/SOURCES AND USES OF FUNDS Pursuant to the Resolution and the Act, the Bonds and the interest thereon are general obligations of the Issuer, and all taxable property within the boundaries of the Issuer is subject to the levy of taxes to pay the principal of and interest on the Bonds without constitutional or statutory limitation as to rate or amount. Section 76.2 of the Act provides that when an Iowa political subdivision issues general obligation bonds, the governing authority of such political subdivision shall, by resolution adopted before issuing the bonds, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds. A certified copy of this resolution shall be filed with the county auditor in which the issuer is located, giving rise to a duty of the auditor to annually enter this levy for collection from the taxable property within the boundaries of the issuer, until funds are realized to pay the bonds in full. For the purpose of providing for the levy and collection of a direct annual tax sufficient to pay the principal of and interest on the Bonds as the same become due, the Resolution provides for the levy of a tax sufficient for that purpose on all the taxable property in the Issuer in each of the years while the Bonds are outstanding. The Issuer shall file a certified copy of the Resolution with the County Auditor, pursuant to which the County Auditor is instructed to enter for collection and assess the tax authorized. When annually entering such taxes for collection, the County Auditor shall include the same as a part of the tax 13

18 levy for Debt Service Fund purposes of the Issuer and when collected, the proceeds of the taxes shall be converted into the Debt Service Fund of the Issuer and set aside therein as a special account to be used solely and only for the payment of the principal of and interest on the Bonds and for no other purpose whatsoever. Pursuant to the provisions of Section 76.4 of the Act, each year while the Bonds remain outstanding and unpaid, any funds of the Issuer which may lawfully be applied for such purpose, may be appropriated, budgeted and, if received, used for the payment of the principal of and interest on the Bonds as the same become due, and if so appropriated, the taxes for any given fiscal year as provided for in the Resolution, shall be reduced by the amount of such alternate funds as have been appropriated for said purpose and evidenced in the Issuer s budget. Sources and Uses of Funds Following are the estimated sources and uses of funds in connection with the issuance of the Series 2018A Bonds: Sources of Funds Total Par Amount of Bonds $5,620,000 Uses of Funds Deposit to Project Fund Costs of Issuance/Underwriter s Discount Rounding Total Uses of Funds $5,620,000 Following are the estimated sources and uses of funds in connection with the issuance of the Series 2018B Bonds: Details of Certain Terms Sources of Funds Total Par Amount of Bonds $1,575,000 Uses of Funds Deposit to Project Fund Costs of Issuance/Underwriter s Discount Rounding Total Uses of Funds $1,575,000 DESCRIPTION OF THE BONDS The Bonds will be dated, as originally issued, as of June 26, 2018, and will be issued as fully registered Bonds in the denominations of $5,000 or any integral multiple thereof. Principal, including mandatory redemptions on the Bonds will be payable annually on June 1, commencing June 1, Interest on the Bonds will be payable semiannually on each June 1 and December 1, commencing June 1, The Bonds when issued, will be registered in the name of Cede & Co. (the Registered Holder ), as nominee of The Depository Trust Company, New York, New York ( DTC ), the initial custodian for the Bonds, to which principal and interest payments on the Bonds will be made so long as Cede & Co. is the Registered Holder of the Bonds. See DESCRIPTION OF THE BONDS Book - Entry System herein for 14

19 additional information. So long as the Book-Entry Only System is used, individual purchases of the Bonds will be made in book-entry form only, in the principal amount of $5,000 or any integral multiple thereof ( Authorized Denominations ). Individual purchasers ( Beneficial Owners ) of the Bonds will not receive physical delivery of bond certificates, and registration, exchange, transfer, tender and redemption of the Bonds with respect to Beneficial Owners shall be governed by the Book-Entry Only System. So long as the Book-Entry Only System is used, payments from Cede & Co., as the Record Holder, to the Beneficial Owners shall be governed by the Book-Entry Only System. If the Book-Entry Only System is discontinued, the principal of and premium, if any, on the Bonds will be payable upon presentation and surrender at the offices of the Paying Agent and Bond Registrar or a duly appointed successor. Interest on the Bonds will be paid by check or draft mailed by the Bond Registrar to the registered holders thereof as such appear on the registration books maintained by the Bond Registrar as of the close of business on the fifteenth day (whether or not a business day) of the calendar month next preceding such interest payment date (the Record Date ). Registration, Transfer and Exchange So long as the Book-Entry Only System is used, payments from Cede & Co., as the Record Holder, to the Beneficial Owners shall be governed by the Book-Entry Only System. If the Book-Entry Only System is discontinued, the Bonds may be transferred upon surrender of the Bonds at the principal office of the Bond Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his or her attorney duly authorized in writing. The Bonds, upon surrender thereof at the principal office of the Bond Registrar may also be exchanged for other Bonds of the same series, of any authorized denominations having the same form, terms, interest rates and maturities as the Bonds being exchanged. The Bond Registrar will require the payment by the Bond holder requesting such exchange or transfer of any tax or governmental charge required to be paid with respect to such exchange or transfer. The Bond Registrar is not required to (i) issue, transfer or exchange any Bond during a period beginning at the opening of business fifteen days before any selection of Bonds of a particular stated maturity for redemption in accordance with the provisions of the Bond Indenture and ending on the day of the first mailing of the relevant notice of redemption or (ii) to transfer any Bonds or portion thereof selected for redemption. Optional Redemption The Bonds maturing on June 1, 2026 and thereafter are subject to redemption, in whole or in part, on June 1, 2025 and on any date thereafter at a price of par plus accrued interest. If redemption is in part, the selection of the amounts and maturities of the Bonds to be prepaid shall be at the discretion of the County. Notice of redemption shall be given by certified mail to the registered owner of the Bonds not less than 30 days prior to such redemption date. Book-Entry System The Depository Trust Company ( DTC ), New York, NY, will act as securities depository for the Bonds (the Bonds ). The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for the Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a 15

20 member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at and Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC s records. The ownership interest of each actual purchaser of each Bonds ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record date. The 16

21 Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the County or Agent, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with Bonds held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, Agent, or the County, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the County or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the County or Agent. Under such circumstances, in the event that a successor depository is not obtained, certificates for the Bonds are required to be printed and delivered. The County may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates for the Bonds will be printed and delivered to DTC. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the County believes to be reliable, but the County takes no responsibility for the accuracy thereof. BONDHOLDERS RISK An investment in the Bonds involves an element of risk. In order to identify risk factors and make an informed investment decision, potential investors should be thoroughly familiar with this entire Official Statement (including the Appendices hereto) in order to make a judgment as to whether the Bonds are an appropriate investment. Tax Levy Procedures The Bonds are general obligations of the Issuer, payable from and secured by a continuing ad-valorem tax levied against all of the property valuation within the Issuer. As part of the budgetary process of the Issuer, each fiscal year the Issuer will have an obligation to request a debt service levy to be applied against all of the property within the Issuer. A failure on the part of the Issuer to make a timely levy request or a levy request by the Issuer that is inaccurate or is insufficient to make full payments of the debt service on the Bonds for a particular fiscal year may cause Bondholders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds Property Tax Legislation During its 2013 session the Iowa Legislature enacted, and the Governor signed legislation that, among other things, reduces the statewide limit on annual assessed value growth with respect to residential and agricultural property from 4% to 3%, reduces as a rollback the taxable value applicable to commercial, 17

22 industrial and railroad property to 95% for the 2013 assessment year and 90% for the 2014 assessment year and all years thereafter, and provides a partial exemption on telecommunications property. The legislation also created a new separate classification for multi-residential properties which were previously taxed as commercial properties, and assigns an incremental rollback percentage over several years for multi-residential properties such that the multi-residential rollback determination will match that for residential properties in the 2022 assessment year. As a result of this legislation, local governments could experience reductions in property tax revenues over the next several fiscal years. The legislation includes state-funded replacement moneys for a portion of the expected reduction in property tax revenues to the local governments, but such replacement funding is limited in both amount and duration of availability. There can be no assurance the state-funded replacement moneys will be provided by the state, if at all, during the term the Bonds remain outstanding. The legislation does not limit the legal obligation of the Issuer to pay debt service on the Bonds or the amount the Issuer is required to levy for payments of debt service on the Bonds, however, there can be no assurances that it will not have a material adverse impact with respect to the Issuer s financial position. Changes in Property Taxation From time to time the Iowa General Assembly has altered the method of property taxation and could do so again. Any alteration in property taxation structure could affect property tax revenues available to pay the Bonds. Historically, the Iowa General Assembly has applied changes in property taxation structure on a prospective basis; however, there is no assurance that future changes in properly taxation structure by the Iowa General Assembly will not be retroactive. It is impossible to predict the outcome of future property tax changes by the Iowa General Assembly or their potential impact on the Bonds and the security for the Bonds. Matters Relating to Enforceability of Agreements Bondholders shall have and possess all the rights of action and remedies afforded by the common law, the Constitution and statutes of the State of Iowa and of the United States of America for the enforcement of payment of the Bonds, including, but not limited to, the right to a proceeding in law or in equity by suit, action or mandamus to enforce and compel performance of the duties required by Iowa law and the Bond Resolution. The practical realization of any rights upon any default will depend upon the exercise of various remedies specified in the Bond Resolution or the Loan Agreement. The remedies available to the Bondholders upon an event of default under the Bond Resolution or the Loan Agreement, in certain respects, may require judicial action, which is often subject to discretion and delay. Under existing law, including specifically the federal bankruptcy code, certain of the remedies specified in the Loan Agreement or the Bond Resolution may not be readily available or may be limited. A court may decide not to order the specific performance of the covenants contained in these documents. The legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by general principles of equity and public policy and by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. No representation is made, and no assurance is given, that the enforcement of any remedies with respect to such assets will result in sufficient funds to pay all amounts due under the Bond Resolution or the Loan Agreement, including principal of and interest on the Bonds. Secondary Market 18

23 There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history of economic prospects connected with a particular issue, secondary marketing practices in connection with a particular Bond or Bonds issue are suspended or terminated. Additionally, prices of bond or note issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price of the Bonds. Rating Loss Moody s Investor Services ( Moody s ) has assigned a rating to the Bonds. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that the rating with continue for any given period of time, or that such rating will not be revised, suspended or withdrawn, if, in the judgment of Moody s, circumstances so warrant. A revision, suspension or withdrawal of a rating may have an adverse effect on the market price of the Bonds. Forward-Looking Statements This Official Statement contains statements relating to future results that are forward-looking statements as defined in the Private Securities Litigation Reform Act of When used in this Official Statement, the words estimate, forecast, intend, expect and similar expressions identify forward-looking statements. Any forward-looking statement is subject to uncertainty. Accordingly, such statements are subject to risks that could cause actual results to differ, possibly materially, from those contemplated in such forward-looking statements. Inevitably, some assumptions used to develop forward-looking statements will not be realized or unanticipated events and circumstances may occur. Therefore, investors should be aware that there are likely to be differences between forward-looking statements and the actual results. These differences could be material and could impact the availability of funds of the Issuer to pay debt service when due on the Bonds. DTC-Beneficial Owners Beneficial Owners of the Bonds may experience some delay in the receipt of distributions of principal of and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC will credit such distributions to the accounts of the Participants which will thereafter credit them to the accounts of the Beneficial Owner either directly or indirectly through indirect Participants. Neither the Issuer nor the Paying Agent will have any responsibility or obligation to assure that any such notice or payment is forwarded by DTC to any Participants or by any Participant to any Beneficial Owner. In addition, since transactions in the Bonds can be effected only through DTC Participants, indirect participants and certain banks, the ability of a Beneficial Owner to pledge the Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will be permitted to exercise the rights of registered Owners only indirectly through DTC and the Participants. Summary The foregoing is intended only as a summary of certain risk factors attendant to an investment in the Bonds. In order for potential investors to identify risk factors and make an informed investment decision, 19

24 potential investors should become thoroughly familiar with this entire Official Statement and the Appendices hereto. CONTINUING DISCLOSURE In order to assist the Underwriter(s) in complying with SEC Rule 15c2-12 (the Rule ), pursuant to a resolution awarding the Issue and the Continuing Disclosure Certificate (the Certificate ) to be executed on behalf of the County on or before Bond Closing, the County has and will covenant for the benefit of holders of the Bonds to annually provide certain financial and operating data, relating to the County to the Municipal Securities Rulemaking Board ( MSRB ) in an electronic format prescribed by the MSRB, and to provide notices of the occurrence of certain events enumerated in the Rule to the MSRB. The specific nature of the Certificate, as well as the information to be contained in the annual report or the notices of material events is set forth in the Continuing Disclosure Certificate in substantially the form attached hereto as APPENDIX B FORM OF CONTINUING DISCLOSURE CERTIFICATE. The County did not file their audited financial statements for fiscal year 2011 for the general obligation bonds, Series 2009, 2010A and 2010B. As of the date of this Final Official Statement the County has filed their audit for fiscal year 2011 for the above listed bond issues. A failure by the County to comply with the Certificate will not constitute an event of default on the Bonds (although holders will have an enforceable right to specific performance). Nevertheless, such a failure must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. Please see APPENDIX B FORM OF CONTINUING DISCLOSURE CERTIFICATE herein for additional information. UNDERWRITING The Series 2018A Bonds are being purchased from the County by (the Series 2018A Underwriter ). The Series 2018A Underwriter will receive total compensation of $ in connection with the purchase of the Series 2018A Bonds assuming all Series 2018A Bonds are sold at the rates and yields set forth on the inside cover page of this Official Statement, which compensation is % of the par value. The obligation to make such purchase is subject to certain terms and conditions, the approval of certain legal matters by counsel and certain other conditions. The Series 2018B Bonds are being purchased from the County by (the Series 2018B Underwriter ). The Series 2018B Underwriter will receive total compensation of $ in connection with the purchase of the Series 2018B Bonds assuming all Series 2018B Bonds are sold at the rates and yields set forth on the inside cover page of this Official Statement, which compensation is % of the par value. The obligation to make such purchase is subject to certain terms and conditions, the approval of certain legal matters by counsel and certain other conditions. MUNICIPAL ADVISOR Robert W. Baird & Co., Milwaukee, Wisconsin and Saint Paul, Minnesota has acted as Municipal Advisor to the County in connection with the issuance of the Bonds. 20

25 FUTURE FINANCING The County does not anticipate the need to finance any capital improvements with the issuance of General Obligation Bonds/Notes within the next six months. BOND RATING The County applied for an Underlying Rating on the Bonds from Moody s Investor Services ( Moody s ). The rating reflects only the views of Moody s, and an explanation of the significance of that rating may be obtained only from Moody s and its published materials. The rating described above is not a recommendation to buy, sell or hold the Bonds. There can be no assurance that any rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely if, in the judgment of Moody s, circumstances so warrant. Therefore, after the date hereof, investors should not assume that the rating is still in effect. A downward revision or withdrawal of the rating is likely to have an adverse effect on the market price and marketability of the Bonds. The Issuer has not assumed any responsibility either to notify the owners of the Bonds of any proposed change in or withdrawal of any rating subsequent to the date of this Official Statement, except in connection with the reporting of events as provided in the Continuing Disclosure Certificate, or to contest any revision or withdrawal. LITIGATION As of, the County has indicated that no litigation is pending or threatened, that would adversely affect the County s financial condition, ability to levy or collect taxes, or tax revenues, or ability to make payments on the Bonds. STATEMENT OF NO DEFAULT The County has no record of default and has met its debt repayment obligations promptly. LEGALITY Legal matters incident to the authorization, issuance and sale of the Bonds (see TAX EXEMPTION AND RELATED TAX MATTERS herein) are subject to the approving legal opinion of Dorsey & Whitney LLP, Des Moines, Iowa, Bond Counsel, a form of which is attached hereto as APPENDIX A FORM OF BOND COUNSEL OPINION. Signed copies of the opinion, dated and premised on law in effect as of the date of original delivery of the Bonds, will be delivered to the Underwriter at the time of such original delivery. The Bonds are offered subject to prior sale and to the approval of legality of the Bonds by Bond Counsel. The legal opinions to be delivered express the professional judgment of Bond Counsel and by rendering a legal opinion, Bond Counsel does not become an insurer or guarantor of the result indicated by that expression of professional judgment or of the transaction or the future performance of the parties to the transaction. Bond Counsel has not been engaged, nor has it undertaken, to prepare or to independently verify the accuracy of the Official Statement, including but not limited to financial or statistical information of the Issuer and risks associated with the purchase of the Bonds, except Bond Counsel has reviewed the information and statements contained in the Official Statement under AUTHORITY AND PURPOSE, SECURITY/SOURCES AND USES OF FUNDS Security and TAX EXEMPTION AND RELATED TAX MATTERS 21

26 TAX EXEMPTION AND RELATED TAX MATTERS Federal Income Tax Exemption: The opinion of Bond Counsel will state that under present laws and rulings, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed under the Internal Revenue Code of 1986 (the Code ), provided, however that such interest must be taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on corporations for taxable years beginning before January 1, The opinion set forth in the preceding sentence will be subject to the condition that the County comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. In the resolution authorizing the issuance of the Bonds, the County will covenant to comply with all such requirements. There may be certain other federal tax consequences to the ownership of the Bonds by certain taxpayers, including without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security and Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will express no opinion with respect to other federal tax consequences to owners of the Bonds. Prospective purchasers of the Bonds should consult with their tax advisors as to such matters. State Income Tax Exemption: The opinion of Bond Counsel will state that the interest on the Series 2018B Bonds is exempt from the taxes imposed by Division II (Personal Net Income Tax) and Division III (Business Tax on Corporations) of Chapter 422 of the Code of Iowa, as amended; it should be noted, however, that interest on the Bonds is required to be included in adjusted current earnings to be used in computing the state alternative minimum taxable income of corporations and financial institutions for purposes of Sections and of the Code of Iowa, as amended. Interest on the Series 2018B Bonds is subject to the taxes imposed by Division V (Taxation of Financial Institutions) of Chapter 422 of the Code of Iowa, as amended. Ownership of the Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Bonds. Prospective purchasers of the Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. Proposed Changes in Federal and State Tax Law: From time to time, there are Presidential proposals, proposals of various federal committees, and legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to herein or adversely affect the marketability or market value of the Bonds or otherwise prevent holders of the Bonds from realizing the full benefit of the tax exemption of interest on the Bonds. Further, such proposals may impact the marketability or market value of the Bonds simply by being proposed. No prediction is made whether such provisions will be enacted as proposed or concerning other future legislation affecting the tax treatment of interest on the Bonds. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax exempt status of the Bonds. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Bonds would be impacted thereby. 22

27 Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation, regulatory initiatives or litigation. Qualified Tax-Exempt Obligations: In the resolution authorizing the issuance of the Bonds, the County will designate the Bonds as qualified tax exempt obligations within the meaning of Section 265(b)(3) of the Code relating to the ability of financial institutions to deduct from income for federal income tax purposes a portion of the interest expense that is allocable to tax-exempt obligations. In the opinion of Bond Counsel, the Bonds are qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Code. Original Issue Discount: Certain maturities of the Bonds may be issued at a discount from the principal amount payable on such Bonds at maturity (collectively, the Discount Bonds ). The difference between the price at which a substantial amount of the Discount Bonds of a given maturity is first sold to the public (the Issue Price ) and the principal amount payable at maturity constitutes original issue discount under the Code. The amount of original issue discount that accrues to a holder of a Discount Bond under section 1288 of the Code is excluded from federal gross income to the same extent that stated interest on such Discount Bond would be so excluded. The amount of the original issue discount that accrues with respect to a Discount Bond under section 1288 is added to the owner s federal tax basis in determining gain or loss upon disposition of such Discount Bond (whether by sale, exchange, redemption or payment at maturity). Interest in the form of original issue discount accrues under section 1288 pursuant to a constant yield method that reflects semiannual compounding on dates that are determined by reference to the maturity date of the Discount Bond. The amount of original issue discount that accrues for any particular semiannual accrual period generally is equal to the excess of (1) the product of (a) one-half of the yield on such Discount Bonds (adjusted as necessary for an initial short period) and (b) the adjusted issue price of such Discount Bonds, over (2) the amount of stated interest actually payable. For purposes of the preceding sentence, the adjusted issue price is determined by adding to the Issue Price for such Discount Bonds the original issue discount that is treated as having accrued during all prior semiannual accrual periods. If a Discount Bond is sold or otherwise disposed of between semiannual compounding dates, then the original issue discount that would have accrued for that semiannual accrual period for federal income tax purposes is allocated ratably to the days in such accrual period. An owner of a Discount Bond who disposes of such Discount Bond prior to maturity should consult owner s tax advisor as to the amount of original issue discount accrued over the period held and the amount of taxable gain or loss upon the sale or other disposition of such Discount Bond prior to maturity. Owners who purchase Discount Bonds in the initial public offering but at a price different than the Issue Price should consult their own tax advisors with respect to the tax consequences of the ownership Discount Bonds. The Code contains provisions relating to the accrual of original issue discount in the case of subsequent purchasers of bonds such as the Discount Bonds. Owners who do not purchase Discount Bonds in the initial offering should consult their own tax advisors with respect to the tax consequences of the ownership of the Discount Bonds. 23

28 Original issue discount that accrues in each year to an owner of a Discount Bond may result in collateral federal income tax consequences to certain taxpayers. No opinion is expressed as to state and local income tax treatment of original issue discount. All owners of Discount Bonds should consult their own tax advisors with respect to the federal, state, local and foreign tax consequences associated with the purchase, ownership, redemption, sale or other disposition of Discount Bonds. Original Issue Premium: Certain maturities of the Bonds may be issued at a premium to the principal amount payable at maturity. Except in the case of dealers, which are subject to special rules, Bondholders who acquire the Bonds at a premium must, from time to time, reduce their federal tax bases for the Bonds for purposes of determining gain or loss on the sale or payment of such Bonds. Premium generally is amortized for federal income tax purposes on the basis of a bondholder s constant yield to maturity or to certain call dates with semiannual compounding. Bondholders who acquire any Bonds at a premium might recognize taxable gain upon sale of the Bonds, even if such Bonds are sold for an amount equal to or less than their original cost. Amortized premium is not deductible for federal income tax purposes. Bondholders who acquire any Bonds at a premium should consult their tax advisors concerning the calculation of bond premium and the timing and rate of premium amortization, as well as the state and local tax consequences of owning and selling the Bonds acquired at a premium. (Remainder of page left intentionally blank) 24

29 Location/Access/Transportation COUNTY GENERAL INFORMATION* The County is located in east central Iowa with administrative offices located in the City of Cedar Rapids, the County Seat. Cedar Rapids is located approximately 30 miles north of Iowa City, 40 miles southeast of Waterloo, and 100 miles east of Des Moines. Linn County is the second most populous county in the State behind Polk County. The County is comprised of all or part of eighteen incorporated communities, eleven villages, and fourteen public community school districts. Tax Base For taxes collectable in 2017, the tax breakdown is: 68.67% residential, 4.59% agricultural, 17.06% commercial & industrial, 9.32% public utility, 0% seasonal/recreational commercial and residential, 0.36% railroad and 0% personal property. Area 463,424 acres ( Square Miles) Population 2010 Census 211, Estimate 220, Estimate 219, Estimate 224,171 Labor Force Data Comparative average labor force and unemployment rate figures for 2018 (through February) and yearend Figures are not seasonally adjusted and numbers of people are estimated by place of residence. February Unemployment Unemployment Labor Force Rate Labor Force Rate Linn County 118, % 118, % Cedar Rapids MSA 142, % 142, % Iowa 1,671, % 1,678, % County Government Linn County, organized on June 10, 1839, is governed by a Board of Supervisors that is comprised of a Board Chair and four Supervisors elected by district for overlapping four-year terms. The positions of Sheriff, Auditor, Attorney, Recorder, and Treasurer are also elected. In the November 2016 election, more than 50 percent of voters approved a change that will reduce the size of the Board to three members. * Information in this section provided by the County unless otherwise noted. Source: Woods and Poole Economics, Inc. Source: Iowa Department of Employment and Economic Development website at 25

30 Transportation The Linn County Secondary Road Department maintains 1,147 miles of roads and 259 bridges. Approximately 378 miles (32%) of the road system is hard surfaced (asphalt, concrete or seal coat) and the remaining is rock surfaced. The County is divided into four maintenance districts which provide the following services: snow removal, drainage maintenance, road blading, shoulder maintenance, roadway patching, dust control, pavement markings, right-of-way conformance, roadside plantings and mowing, sign maintenance, etc. Pension Plan Plan Description - IPERS membership is mandatory for employees of the County, except for those covered by another retirement system. Employees of the County are provided with pensions through a cost-sharing multiple employer defined benefit pension plan administered by Iowa Public Employees Retirement System (IPERS). IPERS issues a stand-alone financial report which is available to the public by mail at 7401 Register Drive P.O. Box 9117, Des Moines, Iowa or at IPERS benefits are established under Iowa Code chapter 97B and the administrative rules thereunder. Chapter 97B and the administrative rules are the official plan documents. The following brief description is provided for general informational purposes only. Refer to the plan documents for more information. Pension Benefits A regular member may retire at normal retirement age and receive monthly benefits without an early retirement reduction. Normal retirement age is age 65, any time after reaching age 62 with 20 or more years of covered employment, or when the member s years of service plus the member s age at the last birthday equals or exceeds 88, whichever comes first. (These qualifications must be met on the member s first month of entitlement to benefits.) Members cannot begin receiving retirement benefits before age 55. The formula used to calculate a Regular member s monthly IPERS benefit includes: A multiplier (based on years of service). The member s highest five-year average salary. (For members with service before June 30, 2012, the highest three-year average salary as of that date will be used if it is greater than the highest five-year average salary.) Sheriff and deputy and protection occupation members may retire at normal retirement age which is generally at age 55. Sheriff and deputy and protection occupation members may retire any time after reaching age 50 with 22 or more years of covered employment. If a member retires before normal retirement age, the member s monthly retirement benefit will be permanently reduced by an early-retirement reduction. The early-retirement reduction is calculated differently for service earned before and after July 1, For service earned before July 1, 2012, the reduction is 0.25 percent for each month that the member receives benefits before the member s earliest normal retirement age. For service earned starting July 1, 2012, the reduction is 0.50 percent for each month that the member receives benefits before age 65. Generally, once a member selects a benefit option, a monthly benefit is calculated and remains the same for the rest of the member s lifetime. However, to combat the effects of inflation, retirees who began receiving benefits prior to July 1990 receive a guaranteed dividend with their regular November benefit payments. 26

31 Disability and Death Benefits - A vested member who is awarded federal Social Security disability or Railroad Retirement disability benefits is eligible to claim IPERS benefits regardless of age. Disability benefits are not reduced for early retirement. If a member dies before retirement, the member s beneficiary will receive a lifetime annuity or a lump-sum payment equal to the present actuarial value of the member s accrued benefit or calculated with a set formula, whichever is greater. When a member dies after retirement, death benefits depend on the benefit option the member selected at retirement. Contributions - Effective July 1, 2012, as a result of a 2010 law change, the contribution rates are established by IPERS following the annual actuarial valuation, which applies IPERS Contribution Rate Funding Policy and Actuarial Amortization Method. Statute limits the amount rates can increase or decrease each year to 1 percentage point. IPERS Contribution Rate Funding Policy requires that the actuarial contribution rate be determined using the entry age normal actuarial cost method and the actuarial assumptions and methods approved by the IPERS Investment Board. The actuarial contribution rate covers normal cost plus the unfunded actuarial liability payment based on a 30-year amortization period. The payment to amortize the unfunded actuarial liability is determined as a level percentage of payroll, based on the Actuarial Amortization Method adopted by the Investment Board. In fiscal year 2017, pursuant to the required rate, Regular members contributed 5.95 percent of pay and the County contributed 8.93 percent for a total rate of percent. Sheriff and deputy members and the County both contributed 9.63 percent of pay for a total rate of percent. Protection occupation members contributed 6.56 percent of pay and the County contributed 9.84 percent for a total rate of percent. Audited County contributions to IPERS have been as follows: Year County Contribution Year County Contribution 2017 $4,245, $3,583, ,993, ,073, ,953, ,773, ,908, ,613, ,644, ,409,853 Net Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - At June 30, 2017, the County reported a liability of $32,965,226 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The County s proportion of the net pension liability was based on the County s share of contributions to the pension plan relative to the contributions of all IPERS participating employers. At June 30, 2016, the County s collective proportion was %, which was an increase of % from its collective proportion measured as of June 30, For the year ended June 30, 2017, the County recognized pension expense of $3,716,228. At June 30, 2017, the County reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: 27

32 Outflow of Resources Inflow of Resources Difference between expected and actual experience $261,293 $753,891 Changes of assumptions 451, ,341 Net difference between projected and actual earnings on pension plan 6,149,676 0 and investments Changes in proportion and differences between County contributions 12,897 1,274,064 and proportionate share of contributions County contributions subsequent to the measurement date 4,245,707 0 Total $11,120,638 $2,249,296 $4,245,707 reported as deferred outflows of resources related to pensions resulting from the County contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ending June 30, Total 2018 $140, , ,808, ,616, (81,753) $4,625,635 There were no non-employer contributing entities at IPERS. Discount Rate - The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the contractually required rate and that contributions from the County will be made at contractually required rates, actuarially determined. Based on those assumptions, the pension plan s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the County s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate The following presents the County s proportionate share of the net pension liability calculated using the discount rate of 7.5 percent, as well as what the County s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.5 percent) or 1-percentage-point higher (8.5 percent) than the current rate. County's proportionate share of the net pension liability (asset) 1.0% Decrease Discount Rate 1.0% Increase (6.5%) (7.5%) (8.5%) $58,750,606 $32,965,226 $11,232,149 Pension Plan Fiduciary Net Position - Detailed information about the pension plan s fiduciary net position is available in the separately issued IPERS financial report which is available on IPERS website at 28

33 Payables to the Pension Plan - At June 30, 2017, the County has no payables to the defined benefit pension plan for legally required employer contributions and none for legally required employee contributions which had been withheld from employee wages but not yet remitted to IPERS. Other Postemployment Benefits (OPEB) Linn County implemented GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits other Than Pensions prospectively during the year ended June 30, Plan Description The County operates a single-employer retiree benefit plan which provides medical/prescription drug benefits for retirees and their spouses. There are 705 active and 41 retired members in the plan. Participants must be age 55 or older at retirement. The medical/prescription drug coverage, which is a partially self-funded medical plan, is administered by Wellmark. Retirees under age 65 pay the same premium for the medical/prescription drug benefit as active employees, which results in an implicit subsidy and an OPEB liability. The plan does not issue a stand-alone report. Funding Policy The contribution requirements of plan members are established and may be amended by the County. The County currently finances the retiree benefit plan on a pay-as-you-go basis. Annual OPEB Cost and Net OPEB Obligation The County s annual OPEB cost is calculated based on the annual required contribution (ARC) of the County, an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. The following table shows the components of the County s annual OPEB cost for the year ended June 30, 2017, the amount actually contributed to the plan and changes in the County s net OPEB obligation: Annual required contribution $454,033 Interest on net OPEB obligation 96,807 Adjustment to annual required contribution (77,585) Annual OPEB cost 473,255 Contributions made (460,557) Increase in net OPEB obligation 12,698 Net OPEB obligation - beginning of year 1,936,139 Net OPEB obligation - end of year $1,948,837 For calculation of the net OPEB obligation, the actuary has set the transition day as July 1, The end of year net OPEB obligation was calculated by the actuary as the cumulative difference between the actuarially determined funding requirements and the actual contributions for the year ended June 30, For the year ended June 30, 2017, the County contributed $460,557 to the medical plan. Plan members eligible for benefits contributed $490,076, or 48.8% of the premium costs. The County s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation as of June 30, 2017 are summarized as follows: 29

34 Year Ended Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation June 30, 2015 $454, % $1,707,987 June 30, , % 1,936,139 June 30, , % 1,948,837 Funded Status and Funding Progress As of July 1, 2016, the most recent actuarial valuation date for the period July 1, 2016 through June 2017, the actuarial accrued liability was $4,772,114 with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $4,772,114. The covered payroll (annual payroll of active employees covered by the plan) was approximately $42,792,567 and the ratio of the UAAL to covered payroll was 11.2%. As of June 30, 2017, there were no trust fund assets. Estimated Cash and Investment Balances as of June 30, 2018 (estimated) Banking/Financial Institutions * Fund Name Balance General Fund $19,114,172 Special Revenue Funds 5,266,499 MH-DD Fund 11,822,810 Rural Basic 1,086,964 Secondary Roads 1,602,403 County Direct Serv. Fund 1,564,635 Debt Service Fund 627,145 Capital Projects Funds 3,583,645 Internal Service Funds 5,100,000 Agency Funds 20,500,000 Fiduciary Funds 800,000 Total 71,068,273 Banking and financial services provided within the County include the following: City Bank Name Reported Deposits Alburnett Farmers State Bank (branch of Marion, IA) $46,365,000 Cedar Rapids Central State Bank (branch of Elkader, IA) 1,387,000 Kerndt Brothers Savings Bank (branch of Lansing, IA) 9,504,000 Community Savings Bank (branch of Edgewood, IA) 18,332,000 Ohnward Bank & Trust (branch of Cascade, IA) 19,194,000 NXT Bank (branch of Central City, IA) 57,671,000 Farmers State Bank (2 branches of Marion, IA) 61,936,000 Bank of the West (2 branches of San Francisco, CA) 81,437,000 BankIowa of Cedar Rapids 115,094,000 Farmers & Merchants Savings Bank (3 branches of Manchester, IA) 118,919,000 Guaranty Bank and Trust Company 193,880,000 Hills Bank and Trust Company (3 branches of Hills, IA) 239,466,000 Bankers Trust Company (3 branches of Des Moines, IA) 284,491,000 Wells Fargo Bank, NA (6 branches of Sioux Falls, SD) 548,194,000 Cedar Rapids Bank and Trust Company 666,187,000 * Reported deposits are as of June 30, 2017 and were obtained from the Federal Deposit Insurance Corporation (FDIC) website at www2.fdic.gov. 30

35 City Bank Name Reported Deposits U.S. Bank National Association (8 branches of Cincinnati, OH) 830,502,000 Center Point Keystone Savings Bank (branch of Marengo, IA) 9,921,000 Center Point Bank and Trust Company 31,804,000 Central City Ohnward Bank & Trust (branch of Cascade, IA) 9,199,000 NXT Bank (branch of Central City, IA) 40,376,000 Coggon Community Savings Bank (branch of Edgewood, IA) 13,492,000 Ely Solon State Bank (branch of Solon, IA) 14,711,000 Fairfax Fairfax State Savings Bank 126,727,000 Hiawatha Heritage Bank (branch of Marion, IA) 3,771,000 Hiawatha Bank and Trust Company 38,769,000 Farmers State Bank (branch of Marion, IA) 100,444,000 Lisbon Hills Bank and Trust Company (branch of Hills, IA) 21,217,000 Marion Community Savings Bank (branch of Edgewood, IA) 6,911,000 Heritage Bank 9,979,000 Guaranty Bank and Trust Company 17,954,000 Ohnward Bank & Trust (branch of Cascade, IA) 22,369,000 U.S. Bank National Association (branch of Cincinnati, OH) 29,146,000 Bank of the West (branch of San Francisco, CA) 45,853,000 NXT Bank (branch of Central City, IA) 58,621,000 Hills Bank and Trust Company (2 branches of Hills, IA) 66,104,000 Wells Fargo Bank, NA (branch of Sioux Falls, SD) 86,001,000 Farmers State Bank Mount Vernon Bridge Community Bank 17,636,000 Hills Bank and Trust Company (branch of Hills, IA) 74,938,000 Mount Vernon Bank and Trust Company 98,080,000 Palo Palo Savings Bank 27,982,000 Robins Community Savings Bank (branch of Edgewood, IA) 37,033,000 Springville Security State Bank (branch of Waverly, IA) 8,380,000 The Exchange State Bank 29,042,000 Education County residents are served primarily by 14 public school districts located throughout the county. Three private four-year liberal arts colleges are located in Linn County, and the University of Iowa, University of Northern Iowa, and Iowa State University are all within easy driving distance. Iowa s third-largest educational institution, Kirkwood Community College, provides two-year vocational and technical training degrees and ample continuing education opportunities. Recreation For the benefit of the public, Linn County Conservation manages 28 areas, over 100 miles of multi-use trail, 320 campsites, a regionally-significant observatory, a learning center, a modern shooting range, a historic schoolhouse, an arboretum, a watercraft rental facility and offers high-quality educational programming. The Conservation Department headquarters are located at the Wickiup Hill Learning Center northwest of Cedar Rapids. The three park district offices are located in the major county parks (Squaw Creek Park, Morgan Creek Park, Pinicon Ridge Park). The department employees 35 full-time staff, as well as nearly two dozen part-time staff in the summer months. 31

36 Major/Leading Employers * Following are the major/leading employers within the County: Employer Product/Service Number of Employees Rockwell Collins Electronics Equipment & Design 8,700 Transamerica Insurance 3,800 UnityPoint Health - St. Luke s Hospital Hospital 2,979 Cedar Rapids Community Schools Public Education 2,879 Whirlpool Corporation Appliance Manufacturer 2,200 Nordstrom Direct Logistics/Distribution 2,150 Mercy Medical Center Hospital 2,140 Hy-Vee Food Store Grocery Store 2,118 Kirkwood Community College College 1,895 City of Cedar Rapids City Government 1,655 Largest Taxpayers Following are the ten largest taxpayers within the County: Name Business 2017/2018 Taxable Value Percent Taxable Value to Gross Valuation ($10,212,927,258)* Interstate Power /Alliant Energy Utility 233,654, % Archer-Daniels-Midland Grain Processors 83,896, % Transamerica Insurance/Investments 49,290, % St.Lukes Methodist Hospital Hospital, medical center 44,744, % International Paper Company Packaging Materials 36,153, % Mid-American Energy Utility 34,927, % SDG Macerich Shopping mall, real estate 34,422, % Nextera Energy Nuclear Energy 31,030, % ITC Midwest Electric utility 25,194, % Cenral Iowa Power Electric utility 16,711, % Total 590,026, % *Before military and tax increment value adjustments. (Remainder of page left intentionally blank) * Major/Leading employers provided by the County. 32

37 2019 County Budget (Remainder of page left intentionally blank) 33

38 IOWA PROPERTY VALUATIONS Actual Value The Code of Iowa uses the terms actual value, assessed value, market value and actual assessed value interchangeably. The actual value of all taxable property of a local jurisdiction, except utility property, is determined by the County assessor, who must be certified by the State Department of Revenue. Utility property is assessed by the State Department of Revenue. The actual value of all property, with the exception of agricultural property, is determined by establishing the fair and reasonable market value of the property. The actual value of agricultural property is determined by its productivity and net earning capacity pursuant to the Code of Iowa, Section (1)(e). The State Department of Revenue and Finance periodically adjusts inequities among the 99 county and 10 County assessing jurisdictions by issuing equalization orders pursuant to the Code of Iowa, Sections to The actual value of a jurisdiction is the value utilized for computing debt limitations of counties, municipalities, school districts, and other political subdivisions. Taxable Value The taxable value of counties, municipalities, school districts, or other political subdivisions is determined by adjusting or rolling back the assessed value of residential property, agricultural property, commercial property, industrial property, and other classes of property by applying percentages certified to the county auditors of each county by the Director of Revenue no later than November 1 of each fiscal year pursuant to the Code of Iowa, Section (10). These adjustments colloquially referred to as rollbacks are meant to provide an appropriate balance of market value fluctuation that might disproportionately impact the property tax burden placed on classes of property affected by those fluctuations. Property Tax Legislation During the 2013 legislative session, the Iowa General Assembly enacted Senate File 295 (the Act ), which the Governor signed into law on June 12, Among other things, the Act (i) reduced the maximum annual taxable value growth percent, due to revaluation of existing residential and agricultural property, from 4% to 3%, (ii) assigned a rollback (the percentage of a property s value that is subject to tax) to commercial, industrial and railroad property of 95% for the 2013 assessment year and 90% for the 2014 assessment year and all years thereafter, (iii) created a new property tax classification for multiresidential properties (mobile home parks, manufactured home communities, landlease communities, assisted living facilities and property primarily used or intended for human habitation containing three or more separate dwelling units) ( Multi-residential Property ) that began in the 2015 assessment year, and assigned a declining rollback percentage of 3.75% to such properties for each subsequent year until the 2021 assessment year (the rollback percentage for Multi-residential Properties is equal to the residential rollback percentage in the 2022 assessment year and thereafter) and (iv) exempted a specified portion of the assessed value of telecommunication properties. The Act included a standing appropriation to replace some of the tax revenues lost by local governments, including tax increment districts, resulting from the new rollback for commercial and industrial property. Prior to Fiscal Year , the appropriation is a standing unlimited appropriation, but beginning in Fiscal Year the standing appropriation cannot exceed the actual Fiscal Year appropriation amount. The appropriation does not replace losses to local governments resulting from the Act s provisions that reduce the annual revaluation growth limit for residential and agricultural properties from 4% to 3%, the gradual transition for Multi-residential Property from the commercial rollback percentage (100% of Actual Value) to the residential rollback percentage (currently % of Actual 34

39 Valuation), or the reduction in the percentage of telecommunications property that is subject to taxation. Given the wide scope of the statutory changes, and the State of Iowa s discretion in establishing the annual replacement amount that is appropriated each year commencing in Fiscal Year , the impact of the Act on the County s future property tax collections is uncertain and the County is unable to estimate the financial impact of the Act s provisions on the County s future operations. In Moody s Investor Service US Public Finance Weekly Credit Outlook, dated May 30, 2013, Moody s Investor Service ( Moody s ) projected that local governments in the State of Iowa are likely to experience modest reductions in property tax revenues starting in Fiscal Year as a result of the Act, with sizeable reductions possible starting in Fiscal Year According to Moody s, local governments that may experience disproportionately higher revenue losses include regions that have a substantial commercial base, a large share of Multi-residential Property (such as college towns), or significant amounts of telecommunications property. Notwithstanding any decrease in property tax revenues that may result from the Act, Iowa Code section 76.2 provides that when an Iowa political subdivision issues general obligation bonds, the governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the County Auditor or the auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditors to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full. From time to time, other legislative proposals may be considered by the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described in this Official Statement. It cannot be predicted whether or in what forms any of such proposals may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for the levy of taxes by the County. Tax Levies and Collections Property is assessed on a calendar year basis and valued as of January 1 of each year. Property owners are notified by the following April 15 if there has been any increase or decrease in valuation of the property. Assessments as of January 1, 2017 are used to determine tax levies and tax rates for collection in the fiscal year beginning July l, Taxes are collected on a fiscal year running July 1 through June 30. A county collects all tax levies within its jurisdiction and remits, by the 10th of each month, the amount collected through the last day of the preceding month to underlying units of government. Property tax payments are made at the office of each county treasurer in full or one-half by September 30 and March 31, pursuant to the Code of Iowa, Sections and Where the first half of any property tax has not been paid by October 1, such installment becomes delinquent. If the second installment is not paid, it becomes delinquent on April 1. Delinquent taxes are subject to a penalty rate of 1.5% per month. If taxes are not paid when due, the property may be offered at the regular tax sale on the third Monday of June following the delinquency date. Purchasers at the tax sale must pay an amount equal to the taxes, special assessments, interest and penalties due on the property, and funds so received are applied to the payment of taxes. A property owner may redeem from the regular tax sale, but failing redemption within two years, the tax sale purchaser is entitled to a deed which in general conveys the title free and clear of 35

40 all liens except future installment of taxes and assessments. For properties that have previously been advertised, offered for one year or more, and remain unsold for want of bidders, a public sale is held which results in the County acquiring a tax sale certificate on such properties. After twelve months time, and after proper notification of any interested parties, the County is issued the deed. The County may then resell the property for whatever price the market will bear and the proceeds of the sale are credited to the County general fund. The sale eliminates liens of past due installments of taxes and assessments but the property remains subject to future installments. Debt Limit Article XI, Section 3 of the Constitution of the State of Iowa limits the amount of debt outstanding at any time of any county, municipality, school district or other political subdivision to no more than 5% of the actual value, as shown by the last certified state or county tax list, of all taxable property within such county, municipality, school district or other political subdivision. For the purpose of computing the debt limitation, the term actual value is the actual value of taxable property without application of any percentage reduction or rollback, and after deduction of the military exemption on taxable property. (Remainder of page left intentionally blank) 36

41 ECONOMIC AND FINANCIAL INFORMATION * Valuations Valuation Trends Valuation trends have been as follows: 2018/ % Actual Value 2018/2019 Taxable Value (With Rollback) Residential 12,797,236,655 7,096,271,892 Agricultural Land & Building 738,598, ,758,254 Commercial 2,952,246,410 2,623,665,796 Industrial 485,222, ,416,848 Railroads 59,674,025 53,706,623 Other - - Utilities (with Gas & Electric) 1,844,029, ,823,067 Gross Valuation 18,877,007,475 11,097,642,480 Less Military Exemption (17,784,348) (17,779,286) Total Valuation 18,859,223,127 11,079,863,194 Add Captured Tax Increment Value 612,955, ,739,675 Net Valuation 19,472,178,347 11,690,602,869 Assessment Year Fiscal Year Tax Levies 100% Actual Value* Taxable Valuation (With Rollback)** Captured Tax Increment Value Total Taxable Value / ,859,223,127 11,079,863, ,739,675 11,690,602, / ,849,263,590 10,194,443, ,572,157 10,657,015, / ,714,862,818 10,062,751, ,118,141 10,650,869, / ,327,400,073 9,930,551, ,897,399 10,507,449, / ,954,187,113 9,737,184, ,256,026 10,399,440, / ,137,186,118 9,442,081, ,702,753 10,002,784, / ,885,282,262 9,149,441, ,489,719 9,633,931, / ,467,921,546 8,862,714, ,160,322 9,164,875, / ,897,587,168 8,368,454, ,703,315 8,759,157,492 *100% Actual Valuations, before rollback, are after military exemption and after captured tax increment value adjustments. **Taxable Valuations, with rollback, are after the military exemption and before captured tax increment value adjustments. * Information in this section obtained from the Iowa Department of Management website at unless noted otherwise. 37

42 Breakdown of Valuations 2018/ % Actual Value (before military exemption and tax increment adjustments): 2018/2019 Taxable Value with rollback (before military exemption and tax increment adjustments): Tax Rates Residential 12,797,236, % Agricultural Land & Building 738,598, % Commercial 2,952,246, % Industrial 485,222, % Railroads 59,674, % Other % Utilities (with Gas & Electric) 1,844,029, % Total 18,877,007, % Residential 7,096,271, % Agricultural Land & Building 401,758, % Commercial 2,623,665, % Industrial 433,416, % Railroads 53,706, % Other % Utilities (with Gas & Electric) 488,823, % Total 11,097,642, % Following are tax rates for the past five assessable/collection years: County: Tax Rates Per $1,000 Taxable Value Fiscal Year General $ $ $ $ $ Mental Health Services Debt Service Total County $ $ $ $ $ City of Cedar Rapids $ $ $ $ $ School District (Cedar Rapids) Kirkwood Community College and Other Total $ $ $ $ $ (Remainder of page left intentionally blank) 38

43 Tax Levies and Collections Fiscal Year Total Tax Levy (in dollars) Total Tax Collections Collections as a Percent of Current Levy ,032,000 59,883, % ,251,000 59,314, % ,012,000 58,622, % ,936,000 57,953, % ,888,000 56,230, % ,896,000 54,612, % ,397,000 51,004, % ,336,000 47,189, % ,737,000 46,964, % ,959,000 43,158, % (Remainder of page left intentionally blank) 39

44 SUMMARY OF DEBT AND DEBT STATISTICS Statutory Debt Limit * Article XI, Section 3 of the State of Iowa Constitution limits the amount of debt outstanding at any time of any county, municipality or other political subdivision to no more than five percent (5%) of the actual value of all taxable property within the corporate limits, as taken from the last certified state and county tax list. The debt limit for the County, based on its most recent 2018/2019 valuation, is as follows: Computation of Legal Debt Limit as of May 2, 2018: 2018/2019 Net Valuation of 100% Actual Value of Property $18,877,007,475 Less Military Exemption (17,784,348) Add Captured Tax Increment Value 612,955,220 Actual Value for Debt Limit Calculation $19,472,178,347 Times 5% of Actual Value for Debt Limit Calculation x.05 Legal Debt Limit $973,608,917 Outstanding Bonds Applicable to Debt Limit: $2,995,000 Taxable G.O. Juvenile Courthouse Bonds, Series 2010A (BAB-Direct Pay) $145,000 $10,260,000 Taxable G.O. Building Improvement Bonds, Series 2010B (BAB-Direct Pay) 490,000 $7,650,000 G.O. Joint Communication System Bonds, Series 2011A 4,810,000 $1,705,000 G.O. County Building Bonds, Series 2014A 1,540,000 $7,300,000 Taxable G.O. Urban Renewal County Purpose Bonds, Series 2017A 7,300,000 $9,845,000 G.O. Refunding Bonds, Series 2017B 9,575,000 $5,620,000 G.O. Land and Water Legacy Bonds, Series 2018A (this issue) 5,620,000 $1,575,000 G.O. Urban Renewal Economic Development Bonds, Series 2018B (this issue) 1,575,000 Total Debt Applicable to Debt Limit $31,055,000 Legal Debt Margin $942,553,917 (Remainder of page left intentionally blank) * The total debt applicable to the debt limit does not include the outstanding $490,000 of the $550,000 Limited Obligation Monroe Township Fire Station Note. 40

45 * A) Linn County, IA General Obligation Debt Payable from Ad Valorem Taxes (shown by fiscal year and as of May 2, 2018)* Taxable G.O. Juvenile Courthouse Bonds, Series 2010A (QBAB- Direct Pay) Taxable G.O. Building Improvement Bonds, Series 2010B (QBAB- Direct Pay) G.O. Joint Communication System Bonds, Series 2011A G.O. County Building Bonds, Series 2014A Taxable G.O. Urban Renewal County Purpose Bonds, Series 2017A Purpose Dated: 9/30/ /23/ /1/2011 9/2/2014 6/22/2017 Par Amount: 2,995,000 10,260,000 7,650,000 1,750,000 7,300,000 Maturity: 1-Jun 1-Jun 1-Jun 1-Jun 1-Jun Footnote: A A , , , , , ,000 1,710, , ,000 1,735, , , , , , , , , , , , , , , , , , , , , , , ,000 0 TOTAL 145, ,000 4,810,000 1,540,000 7,300,000 Debt summary reflects payments for issues subject to mandatory redemption. For more information please refer to the applicable official statement that can be viewed by borrower at: The 2010A Bonds and 2010B Bonds were crossover advance refunded by the 2017B Bonds and will be redeemed on June 1, Linn County, IA General Obligation Debt Payable from Ad Valorem Taxes (shown by fiscal year and as of May 2, 2018)* G.O. Refunding Bonds, Series 2017B G.O. Land and Water Legacy Bonds, Series 2018A G.O. Economic Development Bonds, Series 2018B Purpose Dated: 12/4/2017 6/27/2018 6/27/2018 Par Amount: 9,575,000 5,620,000 1,575,000 Total Total Maturity: 1-Jun 1-Jun 1-Jun Principal P & I Footnote: A A , ,275,000 1,841, , ,000 90,000 3,335,000 4,052, , ,000 90,000 3,375,000 4,050, , ,000 95,000 2,195,000 2,808, , ,000 95,000 2,240,000 2,805, , ,000 95,000 2,295,000 2,807, , , ,000 2,360,000 2,814, , , ,000 2,420,000 2,812, , , ,000 2,495,000 2,821, , , ,000 1,935,000 2,199, , , ,000 1,370,000 1,585, , , ,000 1,410,000 1,591, , , ,000 1,360,000 1,503, , , , , , , , , , , , , , , , , , , , , , , , , , , ,875 TOTAL 9,575,000 5,620,000 1,575,000 31,055,000 37,154,528 * Debt summary reflects payments for issues subject to mandatory redemption. For more information please refer to the applicable official statement that can be viewed by borrower at: A) Principal and interest subject to change 41

46 Linn County, IA Limited Obligation Debt (shown by fiscal year and as of May 2, 2018)* * Limited Obligation Monroe Township Fire Purpose Station Note Dated: 7/18/2014 Par Amount: 550,000 Total Total Maturity: 1-Jun Principal P & I Footnote: ,000 20,000 28, ,000 20,000 36, ,000 25,000 41, ,000 25,000 40, ,000 25,000 39, ,000 25,000 39, ,000 25,000 38, ,000 30,000 42, ,000 30,000 41, ,000 30,000 40, ,000 30,000 39, ,000 30,000 38, ,000 35,000 42, ,000 35,000 40, ,000 35,000 39, ,000 35,000 37, ,000 35,000 36,400 TOTAL 490, , ,513 Debt summary reflects payments for issues subject to mandatory redemption. For more information please refer to the applicable official statement that can be viewed by borrower at: (Remainder of page left intentionally blank) 42

47 Indirect Debt 1 as of June 30, 2017 Applicable to Linn County Outstanding Debt Percent 2 Amount School Districts: Alburnett $ 1,770, % $ 1,770,000 Anamosa 14,215, % 841,528 Cedar Rapids 11,080, % 11,080,000 Center Point-Urbana 15,310, % 9,388,092 Central City 2,555, % 2,555,000 College Community 80,680, % 68,440,844 Linn-Mar 27,305, % 27,305,000 Lisbon 455, % 299,372 Marion 7,760, % 7,760,000 Mount Vernon 3,955, % 3,853,752 North Linn 2,680, % 1,800,692 Solon 25,450, % 119,615 Springville 4,470, % 4,470,000 Kirkwood Community College 56,343, % 24,852,897 Cities: Alburnett $ 1,190, % $ 1,190,000 Cedar Rapids 160,955, % 160,955,075 Center Point 3,105, % 3,105,000 Central City 1,315, % 1,315,000 Coggon 355, % 355,000 Ely 1,845, % 1,845,000 Fairfax 6,998, % 6,998,000 Hiawatha 22,980, % 22,980,000 Lisbon 2,053, % 2,053,000 Marion 48,305, % 48,305,000 Mount Vernon 7,355, % 7,355,000 Palo 2,205, % 2,205,000 Robins 7,645, % 7,645,000 Springville 355, % 354,965 Walker 1,235, % 1,235,000 Total $432,432,832 (Remainder of page left intentionally blank) 1 Only those taxing jurisdictions with general obligation debt outstanding are included. Debt figures do not include non-general obligation debt, general obligation debt supported by revenues, short-term obligation debt or general obligation tax/aid anticipation certificates of indebtedness. 2 The percentage of overlapping debt applicable is estimated by using assessed property values. Applicable percentages were estimated by determining the portion of each entity's taxable assessment value that is within the County's boundaries and dividing it by the entities total assessed value.

48 Direct Debt General Obligation debt secured by taxes (includes these issues) $31,055,000 Direct Debt $31,055,000 Add taxpayers share of indirect debt $432,432,832 Direct and Indirect Debt $448,556,139 Limited Obligation Debt Limited Obligation Monroe Township Fire Station Note $490,000 Factors for Ratio Computations 2018/ % Actual Value 1 $19,472,178, /2019 Taxable Value 1 $11,690,602,869 County Population (2018 estimate) 224,171 Debt Ratios Direct Debt Indirect Debt Direct and Indirect Debt To Actual Value 0.13% 2.17% 2.30% To Taxable Value 0.22% 3.62% 3.84% Per Capita $115 $1,886 $2,001 1 After military exemption and tax increment adjustments. 2

49 APPENDIX A FORM OF BOND COUNSEL OPINION

50 [Form of Bond Counsel Opinion] We hereby certify that we have examined certified copies of the proceedings (the Proceedings ) of the Board of Supervisors of Linn County, Iowa (the Issuer ), passed preliminary to the issue by the Issuer of its General Obligation Land and Water Legacy Bonds, Series 2018A (the Bonds ) in the amount of $5,620,000*, dated June 26, 2018, in the denomination of $5,000 each, or any integral multiple thereof. The Bonds mature on June 1 in each of the respective years and in the principal amounts and bear interest payable semiannually, commencing June 1, 2019, at the respective rates as follows: Year Principal Amount Interest Rate Per Annum Year Principal Amount Interest Rate Per Annum 2019 $235,000 % 2029 $275,000 % 2020 $225,000 % 2030 $280,000 % 2021 $230,000 % 2031 $290,000 % 2022 $235,000 % 2032 $300,000 % 2023 $240,000 % 2033 $310,000 % 2024 $245,000 % 2034 $320,000 % 2025 $250,000 % 2035 $335,000 % 2026 $255,000 % 2036 $345,000 % 2027 $260,000 % 2037 $355,000 % 2028 $265,000 % 2038 $370,000 % Bonds maturing on June 1 in each of the years 2026 to 2038, inclusive, are subject to redemption prior to maturity on June 1, 2025 or on any date thereafter, at a price of par and accrued interest. Based upon our examination, we are of the opinion, as of the date hereof, that: 1. The Proceedings show lawful authority for such issue under the laws of the State of Iowa. 2. The Bonds are valid and binding general obligations of the Issuer.

51 Page 2 3. All taxable property within the boundaries of the Issuer is subject to the levy of taxes to pay the principal of and interest on the Bonds without constitutional or statutory limitation as to rate or amount. 4. The interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal income tax purposes and is not treated as a preference item in calculating the federal alternative minimum tax imposed under the Internal Revenue Code of 1986 (the Code ); it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations for taxable years beginning before January 1, 2018, such interest is taken into account in determining adjusted current earnings. The opinions set forth in the preceding sentence are subject to the condition that the Issuer comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Issuer has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. 5. The Bonds are qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Code. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that the Bonds be, or continue to be, qualified tax-exempt obligations. The Issuer has covenanted to comply with each such requirement. We express no opinion regarding other federal or state tax consequences arising with respect to the Bonds. The rights of the owners of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights heretofore or hereafter enacted to the extent constitutionally applicable, and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. *Subject to adjustment DORSEY & WHITNEY LLP

52 [Form of Bond Counsel Opinion] We hereby certify that we have examined certified copies of the proceedings (the Proceedings ) of the Board of Supervisors of Linn County, Iowa (the Issuer ), passed preliminary to the issue by the Issuer of its General Obligation Urban Renewal Economic Development Bonds, Series 2018B (the Bonds ) in the amount of $1,575,000*, dated June 26, 2018, in the denomination of $5,000 each, or any integral multiple thereof, in evidence of the Issuer s obligation under a certain loan agreement (the Loan Agreement ), dated June 26, The Bonds mature on June 1 in each of the respective years and in the principal amounts and bear interest payable semiannually, commencing June 1, 2019, at the respective rates as follows: Year Principal Amount Interest Rate Per Annum Year Principal Amount Interest Rate Per Annum 2019 $90,000 % 2027 $105,000 % 2020 $90,000 % 2028 $110,000 % 2021 $95,000 % 2029 $110,000 % 2022 $95,000 % 2030 $115,000 % 2023 $95,000 % 2031 $120,000 % 2024 $100,000 % 2032 $120,000 % 2025 $100,000 % 2033 $125,000 % 2026 $105,000 % Bonds maturing on June 1 in each of the years 2026 to 2033, inclusive, are subject to redemption prior to maturity on June 1, 2025 or on any date thereafter, at a price of par and accrued interest. Based upon our examination, we are of the opinion, as of the date hereof, that: 1. The Proceedings show lawful authority for such issue under the laws of the State of Iowa. 2. The Bonds and the Loan Agreement are valid and binding general obligations of the Issuer. 3. All taxable property within the boundaries of the Issuer is subject to the levy of taxes to pay the principal of and interest on the Bonds without constitutional or statutory limitation as to rate or amount.

53 Page 2 4. The interest on the Bonds (including any original issue discount properly allocable to an owner thereof) is excluded from gross income for federal income tax purposes and is not treated as a preference item in calculating the federal alternative minimum tax imposed under the Internal Revenue Code of 1986 (the Code ); it should be noted, however, that for the purpose of computing the alternative minimum tax imposed on corporations for taxable years beginning before January 1, 2018, such interest is taken into account in determining adjusted current earnings. The opinions set forth in the preceding sentence are subject to the condition that the Issuer comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Issuer has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. 5. The Bonds are qualified tax-exempt obligations within the meaning of Section 265(b)(3) of the Code. The opinion set forth in the preceding sentence is subject to the condition that the Issuer comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that the Bonds be, or continue to be, qualified tax-exempt obligations. The Issuer has covenanted to comply with each such requirement. 6. The interest on the Bonds is exempt from the taxes imposed by Division II (Personal Net Income Tax) and Division III (Business Tax on Corporations) of Chapter 422 of the Code of Iowa, as amended; it should be noted, however, that interest on the Bonds is required to be included in adjusted current earnings to be used in computing the state alternative minimum taxable income of corporations and financial institutions for purposes of Sections and of the Code of Iowa, as amended. Interest on the Bonds is subject to the taxes imposed by Division V (Taxation of Financial Institutions) of Chapter 422 of the Code of Iowa, as amended. We express no opinion regarding other federal or state tax consequences arising with respect to the Bonds. The rights of the owners of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights heretofore or hereafter enacted to the extent constitutionally applicable, and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. *Subject to adjustment DORSEY & WHITNEY LLP

54 APPENDIX B FORM OF CONTINUING DISCLOSURE CERTIFICATE

55 LinnCounty / CDC DRAFT CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (the Disclosure Certificate ) is executed and delivered by Linn County, Iowa (the Issuer ), in connection with the issuance of $5,620,000 General Obligation Land and Water Legacy Bonds, Series 2018A and $1,575,000 General Obligation Urban Renewal Economic Development Bonds, Series 2018B (together, the Bonds ), dated June 26, The Bonds are being issued pursuant to resolutions of the Issuer approved on June 13, 2018 (the Resolutions ). The Issuer covenants and agrees as follows: Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12. Section 2. Definitions. In addition to the definitions set forth in the Resolutions, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: Annual Report shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. Beneficial Owner shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. Dissemination Agent shall mean the Dissemination Agent, if any, designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. EMMA shall mean the MSRB s Electronic Municipal Market Access system available at Holders shall mean the registered holders of the Bonds, as recorded in the registration books of the Registrar. Listed Events shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. Municipal Securities Rulemaking Board or MSRB shall mean the Municipal Securities Rulemaking Board, 1300 I Street, N.W., Suite 1000, Washington, D.C Participating Underwriter shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. -1-

56 LinnCounty / CDC Rule shall mean Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. State shall mean the State of Iowa. Section 3. Provision of Annual Reports. (a) Not later than June 30 (the Submission Deadline ) of each year following the end of the fiscal year, the Issuer shall, or shall cause the Dissemination Agent (if any) to, file on EMMA an electronic copy of its Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate in a format and accompanied by such identifying information as prescribed by the MSRB. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report and later than the Submission Deadline if they are not available by that date. If the Issuer s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c), and the Submission Deadline beginning with the subsequent fiscal year will become one year following the end of the changed fiscal year. (b) If the Issuer has designated a Dissemination Agent, then not later than fifteen (15) business days prior to the Submission Deadline, the Issuer shall provide the Annual Report to the Dissemination Agent. (c) If the Issuer is unable to provide an Annual Report by the Submission Deadline, in a timely manner thereafter, the Issuer shall, or shall cause the Dissemination Agent (if any) to, file a notice on EMMA stating that there has been a failure to provide an Annual Report on or before the Submission Deadline. Section 4. Content of Annual Reports. The Issuer s Annual Report shall contain or include by reference the following: (a) The audited financial statements of the Issuer for the prior fiscal year, prepared in accordance with generally accepted accounting principles promulgated by the Financial Accounting Standards Board as modified in accordance with the governmental accounting standards promulgated by the Governmental Accounting Standards Board or as otherwise provided under State law, as in effect from time to time, or, if and to the extent such audited financial statements have not been prepared in accordance with generally accepted accounting principles, noting the discrepancies therefrom and the effect thereof. If the Issuer s audited financial statements are not available by the Submission Deadline, the Annual Report shall contain unaudited financial information (which may include any annual filing information required by State law) accompanied by a notice that the audited financial statements are not yet available, and the audited financial statements shall be filed on EMMA when they become available. -2-

57 LinnCounty / CDC (b) Tables, schedules or other information contained in the official statement for the Bonds, under the following captions: Economic and Financial Information Summary of Debt and Debt Statistics Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which are available on EMMA or are filed with the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available on EMMA. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds: (1) Principal and interest payment delinquencies. (2) Non-payment related defaults, if material. (3) Unscheduled draws on debt service reserves reflecting financial difficulties. (4) Unscheduled draws on credit enhancements reflecting financial difficulties. (5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. (7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers. (9) Defeasances. (10) Release, substitution, or sale of property securing repayment of the securities, if material. (11) Rating changes. (12) Bankruptcy, insolvency, receivership or similar event of the obligated person. -3-

58 LinnCounty / CDC Note to paragraph (12): For the purposes of the event identified in subparagraph (12), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (13) The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material. (b) If a Listed Event described in Section 5(a) paragraph (2), (7), (8) (but only with respect to bond calls under (8)), (10), (13) or (14) has occurred and the Issuer has determined that such Listed Event is material under applicable federal securities laws, the Issuer shall, in a timely manner but not later than ten business days after the occurrence of such Listed Event, promptly file, or cause to be filed, a notice of such occurrence on EMMA, with such notice in a format and accompanied by such identifying information as prescribed by the MSRB. (c) If a Listed Event described in Section 5(a) paragraph (1), (3), (4), (5), (6), (8) (but only with respect to tender offers under (8)), (9), (11) or (12) above has occurred the Issuer shall, in a timely manner but not later than ten business days after the occurrence of such Listed Event, promptly file, or cause to be filed, a notice of such occurrence on EMMA, with such notice in a format and accompanied by such identifying information as prescribed by the MSRB. Notwithstanding the foregoing, notice of Listed Events described in Section (5)(a) paragraphs (8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Resolutions. Section 6. Termination of Reporting Obligation. The Issuer s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds or upon the Issuer s receipt of an opinion of nationally recognized bond counsel to the effect that, because of legislative action or final judicial action or administrative actions or proceedings, the failure of the Issuer to comply with the terms hereof will not cause Participating Underwriters to be in violation of the Rule or other applicable requirements of the Securities Exchange Act of 1934, as amended. -4-

59 LinnCounty / CDC Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or Annual Report prepared by the Issuer pursuant to this Disclosure Certificate. Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied: (a) (i) the amendment or waiver is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (ii) the undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (iii) the amendment or waiver either (1) is approved by a majority of the Holders, or (2) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners; or (b) the amendment or waiver is necessary to comply with modifications to or interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission. In the event of any amendment or waiver of a provision of this Disclosure Certificate, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing audited financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(c), and (ii) the Annual Report for the year in which the change is made will present a comparison or other discussion in narrative form (and also, if feasible, in quantitative form) describing or illustrating the material differences between the audited financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have -5-

60 LinnCounty / CDC no obligation under this Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Issuer to comply with any provision of this Disclosure Certificate, any Holder or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Disclosure Certificate. Direct, indirect, consequential and punitive damages shall not be recoverable by any person for any default hereunder and are hereby waived to the extent permitted by law. A default under this Disclosure Certificate shall not be deemed an event of default under the Resolutions, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent, if any, shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent s negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Dated: June 26, 2018 LINN COUNTY, IOWA Attest: By County Auditor By Chairperson, Board of Supervisors -6-

61 APPENDIX C AUDITED FINANCIAL STATEMENTS

62 COUNTY OF LINN, IOWA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017