CITY OF DES MOINES, IOWA SEC DISCLOSURES

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1 CITY OF DES MOINES, IOWA SEC DISCLOSURES FOR THE FISCAL YEAR ENDED JUNE 30, 2011

2 SEC Disclosures of the City of Des Moines, Iowa For the Fiscal Year Ended June 30, 2011

3 Prepared by the Finance Department

4 CITY OF DES MOINES, IOWA CONTINUING DISCLOSURE REQUIREMENTS INFORMATION TABLE OF CONTENTS CITY OF DES MOINES, IOWA GENERAL OBLIGATION BONDS Purpose... 7 List of General Obligation Bonds... 7 City Property Values... 8 City Indebtedness... 9 City Tax Rates, Levies, and Collections... 9 Major Employers... 9 Average Annual Labor Force Data City Building Permits Issued by Fiscal Year Notice Regarding Utility Franchise Fees SANITARY SEWER SYSTEM Purpose Largest System Users Annual Usage Rates and Charges DES MOINES INTERNATIONAL AIRPORT Purpose Total Enplaned Passengers and Airline Market Shares Total Enplanements and Deplanements Top Ten Providers Operating Revenues Total Cargo and Airline Market Shares (In Pounds) Aviation System Revenues and Expenses PARKING SYSTEM Purpose Parking Rates of the System Parking Facilities Debt Service Coverage Projected Parking Facilities System Cash Flows

5 STORMWATER MANAGEMENT UTILITY Purpose Sales History and Total Stormwater Management Utility Charges Number of Stormwater Management Utility Customers Larger Stormwater Management Customers Stormwater Management Utility Revenues by Classification

6 CITY OF DES MOINES GENERAL OBLIGATION BONDS

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8 City of Des Moines, Iowa Continuing Disclosure Requirements Information For the City of Des Moines General Obligation Bonds For the Fiscal Year Ended June 30, 2011 (Unaudited) Purpose The following information is provided to comply with the SEC Continuing Disclosure Requirements as indicated for all general obligation bonds listed below: CITY OF DES MOINES, IOWA OUTSTANDING BONDS AS OF JUNE 30, 2011 FOLLOWS: OUTSTANDING GENERAL OBLIGATION BONDS ISSUE NAME ISSUE DATE $ 5,950,000 GENERAL OBLIGATION HOTEL-MOTEL TAX REFUNDING BONDS, SERIES 2001E 06/2001 $ 3,170,000 GENERAL OBLIGATION REFUNDING BONDS, TAXABLE SERIES 2002A 03/2002 $ 3,290,000 GENERAL OBLIGATION HOTEL-MOTEL TAX REFUNDING BONDS, TAXABLE SERIES 2002B 03/2002 $30,920,000 GENERAL OBLIGATION BONDS, SERIES 2002E 06/2002 $ 8,515,000 GENERAL OBLIGATION BONDS, SERIES 2002F 06/2002 $ 4,830,000 GENERAL OBLIGATION BONDS, TAXABLE SERIES 2004E 06/2004 $27,775,000 GENERAL OBLIGATION BONDS, SERIES 2005B 05/2005 $10,000,000 GENERAL OBLIGATION BONDS, SERIES 2005C (URBAN RENEWAL) 05/2005 $ 4,985,000 GENERAL OBLIGATION BONDS, TAXABLE SERIES 2005D 05/2005 $28,185,000 GENERAL OBLIGATION REFUNDING BONDS, SERIES 2005E 12/2005 $20,295,000 GENERAL OBLIGATION BONDS, SERIES 2006 A 07/2006 $ 9,210,000 GENERAL OBLIGATION BONDS, SERIES 2006B (URBAN RENEWAL) 07/2006 $ 4,635,000 GENERAL OBLIGATION BONDS, SERIES 2007A 04/2007 $18,415,000 GENERAL OBLIGATION BONDS, SERIES 2007B 04/2007 $15,045,000 GENERAL OBLIGATION BONDS, SERIES 2007C (URBAN RENEWAL) 06/2007 $24,055,000 GENERAL OBLIGATION BONDS, SERIES 2008D 06/2008 $ 6,325,000 GENERAL OBLIGATION BONDS, SERIES 2008 E (URBAN RENEWAL) 06/2008 $ 1,155,000 GENERAL OBLIGATION BONDS, TAXABLE SERIES 2009A 03/2009 $ 2,870,000 GENERAL OBLIGATION BONDS, SERIES 2009B (URBAN RENEWAL) 03/2009 $31,255,000 GENERAL OBLIGATION BONDS, SERIES 2009C 03/2009 $19,605,000 GENERAL OBLIGATION BONDS, TAXABLE SERIES 2009E 06/2009 $ 3,055,000 GENERAL OBLIGATION BONDS, SERIES 2009F (URBAN RENEWAL) 06/2009 7

9 $ 3,115,000 GENERAL OBLIGATION BONDS, TAXABLE SERIES 2009G 06/2009 $15,990,000 GENERAL OBLIGATION BONDS, SERIES 2010A 01/2010 $13,440,000 GENERAL OBLIGATION BONDS, SERIES 2010B (URBAN RENEWAL) 01/2010 $22,630,000 GENERAL OBLIGATION CAPITAL LOAN NOTES 2010C 03/2010 $25,330,000 GENERAL OBLIGATION BONDS, SERIES 2010D 06/2010 $ 2,260,000 GENERAL OBLIGATION BONDS, SERIES 2010E 06/2010 $65,360,000 GENERAL OBLIGATION REFUNDING CAPITAL LOAN NOTES 2010H 12/2010 $45,520,000 GENERAL OBLIGATION BONDS SERIES 2011A 06/2011 See pages of the City s CAFR for additional information about these outstanding bonds. The disclosure reference is provided in each heading below. Section 4 (c)(1) City Property Values 1/1/2009 VALUATIONS (Taxes payable July 1, 2010 throuogh June 30, 2011) 100% ASSESSED TAXABLE VALUE ACTUAL VALUE AMOUNT (with rollback) Residential $ 7,337,746,580 $ 3,424,914,603 Commercial/industrial 2,726,308,470 2,726,308,470 Utilities w/o Gas and Electric 34,292,387 34,292,387 Railroads 10,228,649 10,228,649 Gross valuation 10,108,576,086 6,195,744,109 Less military exemption (16,760,644) (16,760,644) Net valuation 10,091,815,442 6,178,983,465 TIF Increment (used to compute Debt service levies and Constitutional debt limit) $ 629,710,790 $ 629,710,790 Taxed Separately Gas and Electric Utilities $ 322,181,990 $ 218,532,257 Agricultural Land 7,649,680 5,069,540 Agricultural Buildings 591, ,216 8

10 Section 4 (c)(2) City Indebtedness Debt Limit The calculation of the City s debt limit can be found in the Statistical Section on Table 13, page 188 of the FY 2011 Comprehensive Annual Financial Report. A complete listing of the City of Des Moines, Iowa debt can be found in the FY 2011Comprehensive Annual Financial Report on pages 124 through pages 145. Section 4 (c)(3) City Tax Rates, Levies and Collections Tax rates per $1,000 of taxable value can be found in the Statistical Section on Table 8, page 178, of the FY 2011 Comprehensive Annual Financial Report. Tax levies and collections can be found in the Statistical Section on Table 9, page 181, of the FY 2011 Comprehensive Annual Financial Report. Section 4 (c)(4) Major Employers Major employers in the Des Moines metropolitan area are as follows: Iowa Health Systems Health care 7,300 Principal Financial Group Financial services 7,300 Mercy Hospital Medical Center Health care 4,950 Des Moines Public Schools Education 4,872 Nationwide/Allied Insurance Insurance provider 4,370 Hy Vee Food Stores Retail Food Stores 2,000 City of Des Moines Government 2,000 Pioneer Hi-Bred International, Inc Seed Manufacturing 1,900 Marsh Company Insurance provider 1,700 United Parcel Service Shipping solutions 1,600 Wellmark Inc. Insurance provider 1,555 Firestone Agricultural Tire Tire Manufacturing 1,500 John Deere Des Moines Works Manufacturer of Agricultural Equipment 1,300 EDS Corp. Global Technology Services 1,200 Source: Greater Des Moines Partnership, Iowa Workforce Development. 9

11 Section 4 (c)(5) Average Annual Labor Force Data DES MOINES DES MOINES METRO AREA STATE OF IOWA METRO AREA STATE OF IOWA ,900 1,679, % 6.1 % ,600 1,677, % 6.5 % ,300 1,679, % 4.4 % ,000 1,661, % 3.8 % ,300 1,664, % 3.5 % ,000 1,645, % 4.7 % ,900 1,627, % 4.4 % ,600 1,639, % 4.3 % ,500 1,587, % 3.7 % ,900 1,539, % 3.0 % Source: Iowa Workforce Development Section 4 (c)(6) City Building Permits The City building permits are listed on Table 18, page 198, of the FY 2011 Comprehensive Annual Financial Report. 10

12 NOTICE TO HOLDERS OF CITY OF DES MOINES, IOWA GENERAL OBLIGATION BONDS (Update as of June 30, 2011) In a January, decision, the Iowa District Court for Polk County (the District Court ) ruled that gas and electric franchise fees imposed by the City are illegal because they constitute unauthorized taxes. In reaching that decision, the District Court concluded that a franchise fee, when used as a revenue-generating measure, constitutes a tax which has been assessed in violation of the Iowa Code Section (4). The District Court denied the plaintiff s motion to certify the case as a class action, and enjoined the City from collecting the franchise fees from the individual plaintiff while its ruling remains in effect. The City appealed the District Court s rulings to the Iowa Supreme Court and on Mar 26, 2006, the Iowa Supreme Court reversed the District Court s ruling and remanded the case to determine the class certification question and for a trial on the question of the appropriate amount of the franchise fees to be charged. (Kragnes v. City of Des Moines, 714 N.W.2d 632 (Iowa 2006)). According to the Iowa Supreme Court s decision, any franchise fee charged by a city must be reasonably related to the City s administrative and regulatory expenses incurred in the exercise of its police power. Those expenses may include the reasonable costs of inspecting, licensing, supervising, or otherwise regulating the activity the City is franchising and the incidental consequences of the franchised services. The Court agreed that the City s franchise fees may be assessed as a percentage of the gross receipts derived from the utility s sale of its services to the public, so long as the charge is reasonably related to the City s administrative expenses. The District Court subsequently certified a class for purposes of the litigation, consisting of all customers of the gas and electric utilities within the City that have paid gas or electric franchise fees since July 27, The case was tried in October and November, On June 3, 2009 the District Court filed its ruling and determined that the amount of the franchise fees received by the City exceeded the costs allowable under the Kragnes ruling, and ordered a refund in an amount to be determined. City staff estimates that the amount of the refund ordered by the District Court could be as much as $45-50 million. The District Court denied the plaintiff s request for injunctive relief to prevent the City from continuing to collect franchise fees in the amount of 5% of the gross revenue from gas and electric franchises, because of new legislation (described below) enacted by the Iowa General Assembly which permits such fees to be collected. Following post-trial motions, the Iowa Supreme Court granted interlocutory review of the District Court s rulings on November 19, 2009 and ordered an expedited briefing schedule to be followed. The City currently expects that the appeal will be argued and fully submitted to the Iowa Supreme Court sometime during the second quarter of the 2010 calendar year. 11

13 The city also is a defendant in a separate action pending in the District Court, alleging that the City s cable television franchise fee exceeds the reasonable costs of regulating the cable operator in the City s right of way (Lindstrom v. City of Des Moines). A class action was certified in July, The Plaintiff class seeks a refund of the allegedly excess fees collected. This matter is stayed while the Iowa Supreme Court considers whether the action is barred by Iowa Code Section 477A.7(5), adopted in May 2007, which retroactively legalized the prior collection and use of cable television franchise fees as a revenue source. This case was submitted to the Iowa Supreme Court on January 21, 2009 and a ruling is expected shortly. The City ordinances imposing franchise fees on the gross sales of natural gas, electricity and cable television within the City resulted in collections of approximately $12.8 million during the 2009/2010 fiscal year, with total General Fund budgeted revenues for the 2009/2010 fiscal year being approximately $134.8 million. For the 2010/2011 fiscal year, the City anticipates $13.2 million in collections, with total General Fund budgeted revenues of $138.8 million. The City believes it has substantial defenses to these two actions and intends to contest the matters vigorously. There can be no assurance, however, that future rulings in the litigation will not require the City to refund a portion of the franchise fees that have been collected in the past or to substantially reduce the amount of the franchise fees. If the City is required to substantially reduce its franchise fees, City staff presently intends to recommend to the City Council that the City address the loss of franchise fee revenues by reducing or delaying discretionary capital improvements, reallocating costs to other funds or adjusting property tax collections. The City is authorized under Iowa law to certify a special tax levy to pay any final judgments that may be entered, and also may issue general obligation bonds for such purposes following a public hearing on the bond proposal. On April 27, 2009, the Iowa General Assembly adopted Senate file 478 (the Act ) which became effective upon receiving the Governor s approval on May 26, Under the Act, a franchise fee assessed by a city may be based upon a percentage of gross revenues generated from sales of the franchise within the city not to exceed five percent, without regard to the city s cost of inspecting, supervising, and other regulating the franchise. Franchise fees collected pursuant to an ordinance in effect on the effective date of this division of this Act shall be deposited in the city s general fund and such fees collected in excess of the amounts necessary to inspect, supervise, and otherwise regulate the franchise may be used by the city for any other purpose authorized by law. The Act therefore authorizes the collection and usage of City s current franchise fees. However, the Act is not retroactive and will not eliminate the refund claims asserted in the pending litigation as previously described. The City is not aware of any other litigation which could have a material adverse effect on the City s ability to meet its financial obligations. The City knows of no instance in which it has defaulted in the payment of principal or interest on its debt. 12

14 This notice is being provided voluntarily by the City to each of the information repositories identified in the Continuing Disclosure Agreements entered into with respect to the Bonds. The City has no obligation under those Continuing Disclosure Agreements to update the foregoing information or to include any reference thereto in its future annual reports or material event notices filed under the terms of said agreements. Additional voluntary information with respect to the foregoing matters will be provided only at such times, if any, and in such manner as the City determines to be appropriate under the circumstances. 13

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16 SANITARY SEWER SYSTEM

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18 City of Des Moines, Iowa Continuing Disclosure Requirements Information For the City of Des Moines Sanitary Sewer Revenue Bonds For the Fiscal Year Ended June 30, 2011 (Unaudited) Purpose: The following information is provided to comply with the SEC Continuing Disclosure Requirements as indicated for all sanitary sewer revenue bonds listed below: CITY OF DES MOINES, IOWA OUTSTANDING BONDS AS OF JUNE 30, 2011 FOLLOWS: SANITARY SEWER REVENUE BONDS ISSUED $5,965,000 SEWER REVENUE BONDS, SERIES 2004I (STATE REVOLVING FUND LOAN 8) 11/2004 $ 5,160,000 SEWER REVENUE BONDS, SERIES 2004G 11/2004 $14,040,000 SEWER REVENUE BONDS, SERIES 2004H 11/2004 The disclosure reference is provided in each heading that follows. 17

19 Section 4 C (1) Largest System Users (July 1, 2010 through June 30, 2011) Annual Flow Business Name Type of Business Gallons Charges Archer Daniels Midland Soybean Oil Refinery 175,377,374 $ 736,638 Pine Ridge Farms Llc Pork Packing Plant 111,661,440 $ 469,031 Anderson Erikcson Dairy 68,868,360 $ 289,300 Iowa Methodist Hosp Hospital 61,022,588 $ 256,348 Mercy Medical Center Hospital 42,982,324 $ 180,579 Drake University University 38,801,004 $ 163,017 Cargill Inc Soybean Processor 36,167,550 $ 151,957 Polk County Government 29,292,428 $ 123,081 Darling International Inc Rendering Plant 29,157,040 $ 122,512 Wellmark, Inc Insurance 28,905,712 $ 121,457 Section 4 C (2) Annual Usage No. of Annual Usage Fiscal Year Sewage Bills (Gallons) FY ,993 6,816,063,846 FY ,257 6,816,063,846 FY ,652 6,920,665,977 FY ,163 6,955,851,324 FY ,963 6,780,933,197 FY ,232 6,401,754,814 FY ,411 6,413,205,951 FY ,666 6,206,146,989 FY ,967 5,920,607,334 FY ,036 5,824,251,970 Section 4 C (3) Rates and Charges Monthly sanitary sewer charges are imposed upon and collected from system users based on metered water flow to residences and businesses. Billing and collection of charges is performed under contract with Des Moines Water Works and remitted monthly to the City. The City's rate structure utilizes a base monthly fee in addition to a rate per 1,000 gallons of consumption. The table below shows the recent history of sanitary sewer rates and charges. Effective Rate per Date Base Charge 1,000 gallons July 1, 1994 $3.81 $2.25 July 1, 2000 $4.40 $2.97 July 1, 2005 $4.40 $3.21 July 1, 2006 $4.40 $3.46 July 1, 2007 $4.40 $3.74 July 1, 2008 $4.40 $3.96 July 1, 2009 $4.40 $

20 DES MOINES INTERNATIONAL AIRPORT

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22 City of Des Moines, Iowa Continuing Disclosure Requirements Information For the City of Des Moines Airport Revenue Bonds For the Fiscal Year Ended June 30, 2011 (Unaudited) Purpose: The following information is provided to comply with the SEC Continuing Disclosure Requirements as indicated for all airport revenue bonds listed below: CITY OF DES MOINES, IOWA OUTSTANDING BONDS AS OF JUNE 30, 2011 FOLLOWS: AIRPORT REVENUE BONDS ISSUE NAME ISSUE DATE $23,870,000 AVIATION SYSTEM REVENUE BONDS, SERIES 1998B 04/1998 $ 5,225,000 AVIATION SYSTEM REVENUE CAPITAL LOAN NOTES SERIES 2010A 12/2010 $15,990,000 AVIATION SYSTEM REVENUE CAPITAL LOAN NOTES SERIES 2010B 12/2010 $10,330,000 AVIATION SYSTEM REVENUE CAPITAL LOAN NOTES SERIES 2010C $4,900,000 AVIATION SYSTEM REVENUE CAPITAL LOAN NOTES, 12/2010 SERIES 2010D The disclosure reference is provided in each heading that follows. On February 14, 2011, the Des Moines City Council passed an ordinance creating the Des Moines Airport Authority. The Authority officially became a separate entity November 1, 2011, at which time all the assets (except land) of the Des Moines Airport passed from the City s control to the Authority. The Authority is led by a five member Authority Board whose members are nominated by the City Council and are appointed by the Mayor. The City continues to own the land at the Airport, and the Authority has a 99-year lease on that land. All City employees working for the Aviation Department were laid off at the City and offered positions with the Authority as of November 14, 2011; represented employees were also given the option to exercise their bumping rights to remain employed by the City of Des Moines. As defined in the agreement between the Authority and the City, the Authority will continue to use City services (accounting, payroll, human resources, police, etc.). The Authority s separation from the City is intended to be revenue-neutral to the City. 21

23 City of Des Moines, Iowa Des Moines International Airport Total Enplaned Passengers and Airline Market Shares For the Years Ended December 31, 2006 to 2011 Enplanements Airline (1) AirTran ,992 14,337 Allegiant 52,981 62,710 67,504 75,075 79,255 69,529 American 233, , , , , ,963 Continental (2) 23,556 23,409 31,710 25, Delta 98, ,172 83,588 89, , ,925 Frontier (formerly Skyway) 19,924 22,853 26,168 25,410 34,468 68,194 Northwest (3) 226, , , ,905 - United 268, , , , , ,872 US Airways 43,595 38,436 43,806 49,518 43,511 45,962 Charter / Other 11,141 10,508 12,548 5,650 23,218 19,215 Total Enplaned Passengers 978, , , , , ,997 Percentage Change from Prior Year 2.87% 1.34% (4.02%) (8.04%) 4.45% 4.97% (1) In certain cases, the enplanements include flights operated by regional airlines operating as affiliates of the listed airlines. (2) Continental began operating as an affiliate of United in 2010 (3) Northwest merged with Delta in Source: Des Moines International Airport Reference to Continuing Disclosure Agreement: Item #2 22

24 Percent of Total % 0.0% 0.0% 0.0% 1.0% 1.5% 5.4% 6.3% 7.1% 8.6% 8.7% 7.2% 23.8% 23.9% 21.4% 20.3% 18.4% 17.4% 2.4% 2.4% 3.3% 3.0% 0.0% 0.0% 10.1% 11.0% 8.8% 10.2% 29.9% 30.7% 2.0% 2.3% 2.7% 2.9% 3.8% 7.1% 23.2% 20.8% 23.5% 22.3% 0.0% 0.0% 27.4% 28.3% 27.3% 26.5% 31.0% 29.3% 4.5% 3.9% 4.6% 5.7% 4.8% 4.8% 1.1% 1.1% 1.3% 0.6% 2.5% 2.0% 100% 100% 100% 100% 100% 100% 23

25 City of Des Moines, Iowa Des Moines International Airport Total Enplanements and Deplanements For the Years Ended December 31, 2005 to 2010 Year Passengers Enplaned 978, , , , , ,997 Deplaned 980, , , , , ,999 Total 1,959,393 1,982,633 1,896,389 1,752,469 1,831,062 1,912,996 Source: Des Moines International Airport Reference to Continuing Disclosure Agreement: Item #4 24

26 City of Des Moines, Iowa Des Moines International Airport Top Ten Providers - Operating Revenues Fiscal Years Ended June 30 Provider Rank 2011 Revenue Percent of Total Revenue Public parking 1 $7,846, % United Airlines 2 2,528, % Delta Airlines 3 2,244, % United Parcel Service 4 1,750, % American Eagle 5 1,311, % Hertz 6 738, % Federal Express 7 685, % Mesaba Airlines 8 614, % Allegiant Airlines 9 600, % SSP America , % Total - Top Ten Only $18,850, % Total Operating Revenue 26,022,969 Source: Des Moines International Airport Reference to Continuing Disclosure Agreement: Item #5 25

27 City of Des Moines, Iowa Des Moines International Airport Cargo Volume Distribution and Cargo Market Shares For the Years Ended December 31, 2006 to 2011 Total Pounds of Cargo (in thousands) Airline UPS 129, , ,889 89,022 69,653 81,707 FedEx 69,258 66,023 58,712 54,850 54,384 52,928 ABX (DHL/Airborne Express) (1) 4,724 10,202 4, Other All-Cargo Carriers Airline Cargo Carriers 1,285 1, Total Cargo Volume 205, , , , , ,798 (1) ABX (DHL/Airborne Express) discontinued service in December Source: Des Moines International Airport Reference to Continuing Disclosure Agreement: Item #3 26

28 Market Share % 61.3% 64.0% 61.2% 55.6% 60.2% 33.7% 32.8% 32.4% 37.7% 43.4% 39.0% 2.3% 5.1% 2.7% 0.0% 0.0% 0.0% 0.4% 0.3% 0.5% 0.7% 0.7% 0.6% 0.6% 0.5% 0.4% 0.4% 0.3% 0.3% 100% 100% 100% 100% 100% 100% 27

29 City of Des Moines, Iowa Des Moines International Airport Aviation System Revenues and Expenses Fiscal Years Ended June 30 Year Operating Revenues Landing Fees $ 4,508,716 $ 4,650,519 Security Fees 2,084,803 1,785,851 Apron Fees 955,240 1,054,700 Facility Rentals 6,053,813 4,840,340 Parking Fees 6,748,168 7,155,977 Car Rental Concessions 1,827,396 2,079,829 Other Concessions 874,356 1,011,454 Other Airfield-Related Revenue 869, ,427 Other 659, ,913 Total Operating Revenues $ 24,581,985 $ 24,134,010 Other Revenues Passenger Facility Charges 3,809,524 3,950,072 Customer Facility Charges ** - - Investment Earnings 752,322 1,137,586 Capital Grant Revenues 12,342,156 10,369,947 Total Other Revenues $ 16,904,002 $ 15,457,605 Expenses (Operating and Non-Operating) $ (27,348,338) $ (29,929,016) Net Increase (Decrease) in Assets $ 14,137,649 $ 9,662,599 NOTE: The numbers from this table are from the audited financial statements of the Des Moines International Airport. ** In September 2008, the Des Moines International Airport began collecting a Customer Facility Charge (CFC) for all rental car customers in the amount of $2.75 per rental day. Funds collected are to be used solely for the enhancement of rental car operations at the Airport. Source: Des Moines International Airport Reference to Continuing Disclosure Agreement: Item #5 28

30 Year $ 3,063,749 $ 4,396,502 $ 4,059,009 $ 4,755,072 2,151,946 1,881,407 1,414,680 1,586,769 1,201,054 1,106,540 1,220, ,372 5,743,791 5,888,282 6,407,219 6,373,598 7,318,532 7,279,575 7,339,404 7,846,701 2,239,676 2,312,580 1,771,832 2,119,021 1,084,956 1,040,755 1,036,345 1,134, , , , , , , , ,976 $ 24,377,012 $ 25,200,177 $ 24,320,178 $ 26,022,969 3,838,183 3,426,190 3,519,917 3,808,808-1,036,879 1,182,624 1,440,827 1,110, ,627 93,942 82,085 8,822,912 7,706,452 3,147,565 4,707,342 $ 13,772,077 $ 12,596,148 $ 7,944,048 $ 10,039,062 $ (31,660,824) $ (32,339,013) $ (31,307,851) $ (36,589,371) $ 6,488,265 $ 5,457,312 $ 956,375 $ (527,340) 29

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32 PARKING FACILITIES SYSTEM

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34 City of Des Moines, Iowa Continuing Disclosure Requirements Information For the City of Des Moines Parking Facilities Revenue Bonds For the Fiscal Year Ended June 30, 2011 (Unaudited) Purpose: The following information is provided to comply with the SEC Continuing Disclosure Requirements as indicated for all parking facilities revenue bonds listed below: CITY OF DES MOINES, IOWA OUTSTANDING BONDS AS OF JUNE 30, 2011 FOLLOWS: PARKING FACILITIES REVENUE BONDS ISSUE ISSUE NAME DATE $19,545,000 PARKING FACILITIES REVENUE BONDS, SERIES 2000A 6/2002 $ 2,845,000 PARKING SYSTEM CAPITAL LOAN NOTES, SERIES 2009D 3/2009 The disclosure reference is provided in each heading that follows. 33

35 Section 4 (2) Tables of Current Parking Rates of the System The City Council adopted a new parking rate ordinance on May 1, 2000, and again on December 5, The rates in both ordinances were based on the pyramid concept, with the highest rates located in the center of downtown, closest to the major employers and connected to the skywalk system. The lower rates are in the ramps and lots that are on the fringe of the downtown core area. The rates are reviewed to be competitive with private rates in garages downtown--not as high as the premium private ramps underneath office buildings and not as low as surface spots surrounding downtown. The current rates took effect on January 1, The parking rates for the System s facilities are as follows: Third and Court Parking Garage Effective Effective Effective Effective Effective 1/1/2001 1/1/2006 1/1/2007 1/1/2008 1/1/2009 First Hour $0.75 $1.00 $1.10 $1.25 $1.50 Second Hour $0.75 $1.00 $1.10 $1.25 $1.50 Each Additional Hour $0.75 $0.75 $0.80 $0.90 $ Hour Maximum $5.50 $6.00 $6.50 $7.00 $ Hour Maximum $7.00 $8.00 $9.00 $10.00 $11.00 Monthly Floater $75.00 $85.00 $90.00 $95.00 $ Monthly Preferred $ $ $ $ Monthly Reserved $82.50 $ $ $ $ Night (4 p.m. - 6 a.m.) $3.00 $3.25 $3.50 $3.75 Monthly - Night $40.00 $42.50 $45.00 $47.50 $50.00 Prepaid Special Event $2.00 $3.00 $4.00 $5.00 $5.00 Fourth and Grand Parking Garage Effective Effective Effective Effective Effective 1/1/2001 1/1/2006 1/1/2007 1/1/2008 1/1/2009 First Hour $0.60 $1.00 $1.10 $1.25 $1.50 Second Hour $0.60 $1.00 $1.10 $1.25 $1.50 Each Additional Hour $0.75 $0.75 $0.80 $0.90 $ Hour Maximum $5.00 $6.00 $6.50 $7.00 $ Hour Maximum $7.00 $8.00 $9.00 $10.00 $11.00 Monthly Floater $80.00 $85.00 $90.00 $95.00 $ Monthly Preferred $ $ $ $ Monthly Reserved $88.00 $ $ $ $ Monthly-Elsie Mason $50.00 $50.00 $55.00 $60.00 $63.00 Monthly Res.-Elsie Mason $55.00 $60.00 $65.00 $70.00 $73.00 Night (4 p.m. - 6 a.m.) $3.00 $3.25 $3.50 $3.75 Monthly - Night $40.00 $42.50 $45.00 $47.50 $50.00 Prepaid Special Event $2.00 $3.00 $4.00 $5.00 $

36 Fifth and Keo Parking Garage Effective Effective Effective Effective Effective 1/1/2001 1/1/2006 1/1/2007 1/1/2008 1/1/2009 First Hour $0.75 $1.00 $1.10 $1.25 $1.50 Second Hour $0.75 $1.00 $1.10 $1.25 $1.50 Each Additional Hour $0.75 $0.75 $0.80 $0.90 $ Hour Maximum $5.50 $6.00 $6.50 $7.00 $ Hour Maximum $7.00 $8.00 $9.00 $10.00 $11.00 Monthly Floater $75.00 $85.00 $90.00 $95.00 $ Monthly Preferred $ $ $ $ Monthly Reserved $82.50 $ $ $ $ Monthly-Ligutti $50.00 $55.00 $60.00 $63.00 Monthly Res.-Ligutti $55.00 $60.00 $65.00 $70.00 $73.00 Night (4 p.m. - 6 a.m.) $3.00 $3.25 $3.50 $3.75 Monthly - Night $40.00 $42.50 $45.00 $47.50 $50.00 Prepaid Special Event $2.00 $3.00 $4.00 $5.00 $5.00 Fifth and Walnut Parking Garage Effective Effective Effective Effective Effective 1/1/2001 1/1/2006 1/1/2007 1/1/2008 1/1/2009 First Hour $0.75 $1.00 $1.25 $1.50 $1.50 Second Hour $0.75 $1.00 $1.25 $1.50 $1.50 Each Additional Hour $1.00 $1.00 $1.00 $1.00 $ Hour Maximum $7.00 $7.50 $8.00 $8.50 $ Hour Maximum $9.00 $10.00 $11.00 $12.00 $13.00 Monthly Floater $95.00 $95.00 $ $ $ Monthly Preferred $ $ $ $ Monthly Reserved $ $ $ $ $ Night (4 p.m. - 6 a.m.) $3.00 $4.00 $4.25 $4.50 Monthly - Night $40.00 $40.00 $45.00 $50.00 $55.00 Prepaid Special Event $2.00 $3.00 $4.00 $5.00 $5.00 Seventh and Grand Parking Effective Effective Effective Effective Effective Garage 1/1/2001 1/1/2006 1/1/2007 1/1/2008 1/1/2009 First Hour $0.75 $1.00 $1.25 $1.50 $1.50 Second Hour $0.75 $1.00 $1.25 $1.50 $1.50 Each Additional Hour $1.00 $1.00 $1.00 $1.00 $ Hour Maximum $7.00 $7.50 $8.00 $8.50 $ Hour Maximum $9.00 $10.00 $11.00 $12.00 $13.00 Monthly Floater $95.00 $95.00 $ $ $ Monthly Preferred $ $ $ $ Monthly Reserved $ $ $ $ $ Night (4 p.m. - 6 a.m.) $3.00 $4.00 $4.25 $4.50 Monthly - Night $40.00 $40.00 $45.00 $50.00 $55.00 Prepaid Special Event $2.00 $3.00 $4.00 $5.00 $

37 Eighth and Mulberry Parking Garage Effective Effective Effective Effective Effective 1/1/2001 1/1/2006 1/1/2007 1/1/2008 1/1/2009 First Hour $0.75 $1.00 $1.10 $1.25 $1.50 Second Hour $0.75 $1.00 $1.10 $1.25 $1.50 Each Additional Hour $0.75 $0.75 $0.80 $0.90 $ Hour Maximum $5.50 $6.00 $6.50 $7.00 $ Hour Maximum $7.00 $8.00 $9.00 $10.00 $11.00 Monthly Floater $75.00 $85.00 $90.00 $95.00 $ Monthly Preferred $ $ $ $ Monthly Reserved $82.50 $ $ $ $ Night (4 p.m. - 6 a.m.) $3.00 $3.25 $3.50 $3.75 Monthly - Night $40.00 $42.50 $45.00 $47.50 $50.00 Prepaid Special Event $2.00 $3.00 $4.00 $5.00 $5.00 Ninth and Locust Parking Garage Effective Effective Effective Effective Effective 1/1/2001 1/1/2006 1/1/2007 1/1/2008 1/1/2009 First Hour $0.75 $1.00 $1.25 $1.50 $1.50 Second Hour $0.75 $1.00 $1.25 $1.50 $1.50 Each Additional Hour $1.00 $1.00 $1.00 $1.00 $ Hour Maximum $7.00 $7.50 $8.00 $8.50 $ Hour Maximum $9.00 $10.00 $11.00 $12.00 $13.00 Monthly Floater $95.00 $95.00 $ $ $ Monthly Preferred $ $ $ $ Monthly Reserved $ $ $ $ $ Night (4 p.m. - 6 a.m.) $3.00 $4.00 $4.25 $4.50 Monthly - Night $45.00 $45.00 $50.00 $50.00 $55.00 Prepaid Special Event $3.00 $4.00 $5.00 $5.00 Meters-1st Floor-2 Hour $0.75 $1.00/hr $1.10/hr $1.20/hr $1.25/hr Meters-1st Floor -4 Hour $0.75 $1.00/hr $1.10/hr $1.20/hr $1.25/hr Meters-1st Floor -10 Hour $0.25 $0.35/hr $0.40/hr $0.40/hr $0.45/hr Parking meter rates per hour Effective Effective Effective Effective Effective District No. I 1/1/2001 1/1/2006 1/1/2007 1/1/2008 1/1/2009 Two Hour Meters $0.75 $1.00 $1.00 $1.20 $1.25 Four Hour Meters $0.75 $1.00 $1.10 $1.20 $1.25 Ten Hour Meters $0.25 $0.35 $0.40 $0.40 $0.45 Add l 15 min at 30 Min Meters First 15 Min Free $0.75 $1.00 $1.10 $1.20 $

38 District No. II Effective Effective Effective Effective Effective 1/1/2001 1/1/2006 1/1/2007 1/1/2008 1/1/2009 Two Hour Meters $0.40 $0.60 $0.60 $0.70 $0.75 Three Hour Meters $0.60 $0.70 $0.75 Four Hour Meters $0.40 $0.60. $0.60 $0.70 $0.75 Ten Hour Meters $0.25 $0.35 $0.40 $0.40 $0.45 Add l 15 min at 30 Min Meters First 15 Min Free $0.40 $0.60 $0.60 $0.70 $0.75 District No. III Two Hour Meters $0.40 $0.50 $0.50 $0.50 $0.60 Three Hour Meters $0.50 $0.50 $0.60 Four Hour Meters $0.40 $0.50 $0.50 $0.50 $0.60 Ten Hour Meters $0.25 $0.35 $0.40 $0.40 $0.45 Add l 15 min at 30 Min Meters First 15 Min Free $0.40 $0.50 $0.50 $0.50 $0.50 Second Avenue and Walnut Street Municipal Parking Lot Meter Rates Parking meters shall be in operation between the hours of 8:00 AM and 6:00 PM, Mondays through Fridays, and shall be so adjusted as to show legal parking at a rate of $0.50 per hour thru December 31, 2008 ($.060 per hours January 1, 2009)at two hour meters and $0.35 (calendar 2006), $0.40 (calendar 2007, 2008) and $0.45 (calendar 2009) per hour at ten hour meters. East Fifth Street and East Grand Avenue Municipal Parking Lot Meter Rates Parking meters shall be in operation between the hours of 8:00 AM and 6:00 PM, Mondays through Fridays, and shall be so adjusted as to show legal parking at a rate of $0.50 per hour thru December 31, 2008 ($.060 per hours January 1, 2009) at two hour meters and $0.35 (calendar 2006), $0.40 (calendar 2007, 2008) and $0.45 (calendar 2009) per hour at ten hour meters. Reserved monthly parking at 8:00 AM until 6:00 PM, $45.00 (calendar 2006), $50.00 (calendar 2007), $55.00 (calendar 2008), $60.00 (calendar 2009). Parking fines received as the result of payment of parking tickets are included in Gross Revenues of the System. 37

39 City of Des Moines, Iowa Parking System Debt Service Coverage Budgetary Basis Actual Adopted Amended Adopted Projection Projection Opearting Revenues FY FY FY FY FY FY Garage Revenues $ 6,496,160 $ 6,623,000 $ 6,017,000 $ 6,345,000 $ 6,363,000 $ 6,500,000 Parking Meter Receipts 1,580,543 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 Misc. Revenue 407, , , ,635 54,450 54,450 Rented Parking Spaces 46,606 30,000 35,000 35,000 35,000 35,000 Total Operating Revenue $ 8,531,226 $ 8,358,691 $ 7,757,691 $ 8,085,635 $ 8,052,450 $ 8,189,450 Operating Expenses Personal Services $ 1,169,498 $ 1,220,613 $ 1,154,813 $ 1,175,111 $ 1,218,166 $ 1,265,316 Contractual Services 2,497,323 2,496,053 2,455,182 2,531,872 2,563,896 2,596,449 Supplies 59,189 59,400 58,500 58,800 60,564 62,381 Other Charges 128, , , , , ,421 Depreciation 3,585,823 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 Total Operating Expenses $ 7,440,049 $ 7,499,636 $ 7,446,528 $ 7,495,402 $ 7,576,089 $ 7,661,567 Net Revenue $ 1,091,177 $ 859,055 $ 311,163 $ 590,233 $ 476,361 $ 527,883 Add/ Add Back: Interest on Fund Balance $ 25,537 $ - $ 2,576 $ 21,657 $ 39,596 $ 58,303 Overtime Fines 1,122,628 1,210,000 1,210,000 1,210,000 1,210,000 1,210,000 Depreciation 3,585,823 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 Net Revenue Avail. for Debt Service $ 5,825,165 $ 5,669,055 $ 5,123,739 $ 5,421,890 $ 5,325,957 $ 5,396,186 Parking Debt Service (Parity Bonds) Series 2000A Rev. Bonds $ 1,687,517 $ 1,682,126 $ 1,682,126 $ 2,375,471 $ 2,373,525 $ 2,376,644 Series 2000B Taxable Bonds 1,025,140 1,029,203 1,029, Total Debt Service $ 2,712,657 $ 2,711,329 $ 2,711,329 $ 2,375,471 $ 2,373,525 $ 2,376,644 Net Revenues after Debt Service $ 3,112,508 $ 2,957,726 $ 2,412,410 $ 3,046,419 $ 2,952,432 $ 3,019,542 Debt Service Coverage Net Revenue/Revenue Debt Notes: Excludes Park & Ride system expense and revenues which are restricted by federal rules. 38

40 City of Des Moines, Iowa Parking System Cash Flows Budgetary Basis Actual Adopted Amended Adopted Projection Projection FY FY FY FY FY FY Net Revenue After Revenue Debt $ 3,112,508 $ 2,957,726 $ 2,412,410 $ 3,046,419 $ 2,952,432 $ 3,019,542 Parking Garage Lease Purchase 1,738,748-4,596, , , ,000 Net Cash Flow After Total Debt Service $ 1,373,760 $ 2,957,726 $ (2,183,709) $ 2,646,419 $ 2,552,432 $ 2,619,542 Other Expense & Adjustments Add: TIF Infusion $ 1,200,000 $ 1,200,000 $ 1,200,000 $ 1,400,000 $ 1,200,000 $ 1,000,000 Interfund loan - - 4,600, Deduct: Capital Outlay (133,807) (130,000) (130,000) (130,000) (130,000) (130,000) Payment in Lieu of Taxes (588,719) (606,380) (606,380) (624,571) (643,308) (662,607) Return on Investment Charge (1,463,000) (1,506,900) (1,506,900) (1,552,107) (1,598,670) (1,646,630) Other Transfers (1,325,545) (1,713,586) (1,321,667) (622,257) (922,102) (619,313) Total Adj & Other $ (2,311,071) $ (2,756,866) $ 2,235,053 $ (1,528,935) $ (2,094,080) $ (2,058,550) Annual Surplus/(Deficit) $ (937,311) $ 200,860 $ 51,344 $ 1,117,484 $ 458,352 $ 560,992 Beginning Working Capital $ 863,578 $ 1,839 $ (73,733) $ (22,389) $ 1,095,095 $ 1,553,447 Ending Working Capital $ (73,733) $ 202,699 $ (22,389) $ 1,095,095 $ 1,553,447 $ 2,114,439 Restricted Cash Balances Ending Sinking Fund $ 7,115 $ 155,455 $ 68,782 $ 75,865 $ 83,782 $ 92,115 Ending Capital Improvement Fund $ 2,589,818 $ 980,000 $ 1,764,122 $ 425,000 $ - $ 1,500,000 Ending Reserve Fund $ 1,954,500 $ 1,954,500 $ 1,954,500 $ 1,954,500 $ 1,954,500 $ 1,954,500 The City intends to refinance the EMC Lease agreement with an inter-fund transfer from the City's General Fund. $4.6 million is necessary to fully defease the lease and the repayment structure will be $400,000 annually for 12 years as reflected in the cash flow. The City also intends to refinance the 2000A Series with a new issuance of General Obligation Taxable Bonds sometime in July of

41

42 STORMWATER MANAGEMENT UTILITY

43

44 City of Des Moines, Iowa Continuing Disclosure Requirements Information For the City of Des Moines Stormwater Utility Revenue Bonds For the Fiscal Year Ended June 30, 2011 (Unaudited) Purpose: The following information is provided to comply with the SEC Continuing Disclosure Requirements as indicated for all stormwater utility revenue bonds listed below: CITY OF DES MOINES, IOWA OUTSTANDING BONDS AS OF JUNE 30, 2011 FOLLOWS: STORMWATER UTILITY REVENUE BONDS ISSUE ISSUE NAME DATE $ 16,750,000 STORMWATER UTILITY REVENUE BONDS, SERIES 2006D 12/2006 $ 19,300,000 STORM WATER UTILITY REVENUE CAPITAL LOAN NOTES, 10/2010 SERIES 2010F $ 5,100,000 STORMWATER UTILITY REVENUE CAPITAL LOAN NOTES, SERIES 2010G 10/2010 The disclosure reference is provided in each heading that follows. 43

45 Section 4 c (1) Sales History and Total Stormwater Management Utility Charges Fiscal Year Average No. Average Annual Storm Water Ending of Customers ERU Units Sewer Charges ,205 1,967,101 $ 15,710, ,385 1,949,055 $ 14,387, ,726 1,936,292 13,317, ,586 1,928,038 12,159, ,140 1,918,838 11,465, ,287 1,902,602 10,907, ,456 1,889,511 9,974, ,197 1,850,678 9,189, ,504 1,668,337 7,674, ,230 1,684,447 7,755,020 Section 4 c (2) Number of Stormwater Management Utility Customers Fiscal Year Commercial/ Total Ending Residential Industrial Customers ,703 7,502 68, ,863 7,522 68, ,276 7,450 67, ,152 7,434 67, ,810 7,330 67, ,050 7,237 66, ,291 7,165 65, ,152 7,045 64, ,506 6,998 63, ,275 6,955 63,230 44

46 Section 4 c (3) Larger Stormwater Management Customers Customer Monthly ERUs Charge Per Annual Name Billed Month Charges DM International Airport 4,767 $ 39,016 $ 468,195 DM Public Schools 3,807 31, ,924 Iowa State Fair 2,426 19, ,242 City of Des Moines 1,354 11, ,951 State of Iowa 1,313 10, ,983 Iowa Air Guard 1,083 8, ,402 Drake University 1,032 8, ,402 Iowa Methodist Hospital 938 7,677 92,121 HyVee Foods 802 6,562 78,743 New Plan Realty Trust 800 6,548 78,576 Mercy Hospital 797 6,523 78,272 Titan Tire 749 6,131 73,577 Hubbell Realty 660 5,405 64,864 Polk County 624 5,109 61,309 Archer Daniels Midland 618 5,062 60,739 Section 4 c (4) Stormwater Management Utility Revenues By Classification Source of FY2009 Revenue Percentage ERU Units Revenue Commercial 52% 1,008,852 $8,081,735 Residential 45% 891,228 7,139,075 Industrial 3% 61, ,183 Total 100% 1,961,330 15,710,993 45