HUTCHINSON, SHOCKEY, ERLEY & CO. Chicago, Illinois

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1 OFFICIAL STATEMENT DATED JULY 29, 2013 New & Refunding Issue Rating: Standard & Poor s AAA Assuming compliance with certain covenants, in the opinion of Ahlers & Cooney, P.C., Bond Counsel, under present law and assuming continued compliance with the requirements of the Internal Revenue Code of 1986, as amended (the Code ) the interest on the Bonds is excluded from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purpose of the federal alternative minimum tax imposed on individuals and corporations under the Code. However, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on certain corporations. The Bonds will NOT be designated as qualified tax-exempt obligations. See TAX EXEMPTION AND RELATED CONSIDERATIONS herein for a more detailed discussion. CITY OF WEST DES MOINES, IOWA $4,385,000 General Obligation Bonds, Series 2013A Dated: Date of Delivery (August 21, 2013) Principal Due: June 1, The $4,385,000 General Obligation Bonds, Series 2013A (the Bonds ) are being issued pursuant to Division III of Chapter 384 of the Code of Iowa and resolutions to be adopted by the City Council of the City of West Des Moines, Iowa (the City ). The Bonds are being issued to pay costs of opening, widening, extending, grading and draining of right-of-way for street improvements; construction, reconstruction, improvement and repair of bridges and underpasses; rehabilitation, improvements and equipping of City parks; construction and improvement of trail renovations; improvements and equipping city facilities, including parking lot and sidewalk improvements; and aquatic center equipment; and to current refund, on August 22, 2013, $815,000 of the General Obligation Refunding Bonds, Series 2005A (the Series 2005A Bonds ) dated April 1, 2005 maturing June 1, 2014 and The Bonds are general obligations of the City for which the City will pledge its power to levy direct ad valorem taxes to the repayment of the Bonds. The Bonds will be issued as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company ( DTC ). DTC will act as securities depository for the Bonds. Individual purchases may be made in book-entry-form only, in the principal amount of $5,000 and integral multiples thereof. Purchaser will not receive certificates representing their interest in the Bonds purchased. The City s designated Paying Agent, Bankers Trust Company, Des Moines, Iowa, will pay principal of the Bonds, payable annually on each June 1, beginning June 1, 2014, and interest on the Bonds, payable initially on June 1, 2014, and thereafter on each June 1 and December 1 to DTC, which will in turn remit such principal and interest to its participants for subsequent disbursements to the beneficial owners of the Bonds as described herein. Interest and principal shall be paid to the registered holder of a bond as shown on the records of ownership maintained by the registrar as of the 15 th day of the month preceding the payment date (the Record Date ). The Bonds will mature June 1 in the year and amount as follows: CUSIP Base CUSIP Base Year (June 1) Amount Interest Rate Yield Price Year (June 1) Amount Interest Rate Yield Price 2014 $1,080, % 0.28% Q $275, % 2.15% R , % 0.53% Q , % 2.45% R , % 0.84% Q , % 2.75%* * R , % 1.14% Q , % 2.90%* * R , % 1.42% R , % 3.10% R , % 1.80% R39 *Priced to the call date of June 1, 2021 REDEMPTION: Bonds due after June 1, 2021 will be subject to call on said date or on any date thereafter upon terms of par plus accrued interest to date of call. Written notice of such call shall be given at least thirty (30) days prior to the date fixed for redemption to the registered owners of the Bonds to be redeemed at the address shown on the registration books. The Bonds are offered, subject to prior sale, withdrawal or modification, when, as, and if issued subject to the legal opinion of Ahlers & Cooney, P.C., Bond Counsel, of Des Moines, Iowa, to be furnished upon delivery of the Bonds. It is expected that the Bonds will be available for delivery on or about August 21, HUTCHINSON, SHOCKEY, ERLEY & CO. Chicago, Illinois Copyright 2013, American Bankers Association. CUSIP data herein is provided by Standard & Poor s CUSIP Service Bureau, a division of the McGraw-Hill Companies, Inc.

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3 TABLE OF CONTENTS INTRODUCTION... 1 Authority and Purpose... 1 Optional Redemption... 2 Interest; Payment of and Security for the Bonds... 2 Book-Entry-Only Issuance... 2 Future Financing; Litigation... 4 Debt Payment History; Legality... 5 Tax Exemption and Related Considerations... 5 Related Tax Matters... 6 Changes in Federal and State Tax Law... 7 Rating; Financial Advisor... 7 Continuing Disclosure... 7 Sale at Competitive Bidding... 8 Certification... 8 CITY PROPERTY VALUES... 9 Iowa Property Valuations /1/2012Valuations (Taxes Payable July 1, 2013 to June 30, 2014) Gross Taxable Valuation by Class of Property... 9 Trend of Valuations Property Tax Assessments Larger Taxpayers Legislation CITY INDEBTEDNESS Debt Limit; Direct Debt Other Debt Indirect General Obligation Debt Debt Ratios Tax Rates Levies and Tax Collections Levy Limits; Funds on Hand (Cash and Investments as of April 30, 2013) THE CITY City Government; Employees and Pensions Other Post Employment Benefits Union Contracts Insurance GENERAL INFORMATION Location and Transportation; Larger Employers Building Permits; U.S. Census Data Unemployment Rates Education; Retail Sales; Effective Buying Income Financial Services; Financial Statements APPENDIX A - FORM OF LEGAL OPINION APPENDIX B - JUNE 30, 2012 COMPREHENSIVE ANNUAL FINANCIAL REPORT APPENDIX C - FORM OF CONTINUING DISCLOSURE CERTIFICATE

4 City Council Steven K. Gaer Kevin Trevillyan John Mickelson Russ Trimble Ted Ohmart James Sandager Mayor Council Member Council Member Council Member Council Member Council Member Administration Greg L. Sparks, City Manager Jody E. Smith, Deputy City Manager/City Clerk Tim Stiles, Finance Director Richard J. Scieszinski, City General Counsel Bond Counsel Ahlers & Cooney, P.C. Des Moines, Iowa Financial Advisor Public Financial Management, Inc. Des Moines, Iowa

5 OFFICIAL STATEMENT CITY OF WEST DES MOINES, IOWA $4,385,000 General Obligation Bonds, Series 2013A INTRODUCTION This Official Statement contains information relating to the City of West Des Moines, Iowa (the City ) and its issuance of $4,385,000 General Obligation Bonds, Series 2013A (the Bonds ). This Official Statement has been executed on behalf of the City and its Deputy City Manager/City Clerk and may be distributed in connection with the sale of the Bonds authorized therein. Inquiries may be made to Public Financial Management, Inc. 801 Grand Avenue, Suite 3300, Des Moines, Iowa 50309, or by telephoning (515) Information can also be obtained from Tim Stiles, Finance Director, City of West Des Moines, Iowa, 4200 Mills Civic Parkway, West Des Moines, Iowa or by telephoning (515) AUTHORITY AND PURPOSE The Bonds are being issued pursuant to Division III of Chapter 384 of the Code of Iowa and resolutions to be adopted by the City Council of the City. The Bonds are being issued to pay costs of opening, widening, extending, grading and draining of right-of-way for street improvements; construction, reconstruction, improvement and repair of bridges and underpasses; rehabilitation, improvements and equipping of City parks; construction and improvement of trail renovations; improvements and equipping city facilities, including parking lot and sidewalk improvements; and aquatic center equipment; and to current refund, on August 22, 2013, $815,000 of the General Obligation Refunding Bonds, Series 2005A (the Series 2005A Bonds ) dated April 1, 2005 maturing June 1, 2014 and Name of Issue to be Refunded Call Date Call Price Maturities to be Refunded Principal Amount Coupon Series 2005A Bonds August 22, % June 1, 2014 $255, % June 1, , % $815,000 The Sources and Uses of the Bonds are as follows: Sources of Funds Par Amount of the Bonds $4,385, Original Issue Premium 108, Total Uses $4,493, Uses of Funds Deposit to Project Fund $3,611, Redemption of Series 2005A Bonds 815, Underwriter s Discount 25, Cost of Issuance and Contingency 42, Total Uses $4,493,

6 OPTIONAL REDEMPTION The Bonds due after June 1, 2021 will be subject to call prior to maturity in whole, or from time to time in part, in any order of maturity and within a maturity by lot on said date or on any date thereafter at the option of the City, upon terms of par plus accrued interest to date of call. Written notice of such call shall be given at least thirty (30) days prior to the date fixed for redemption to the registered owners of the Bonds to be redeemed at the address shown on the registration books. INTEREST Interest on the Bonds will be payable on June 1, 2014 and semiannually on the 1 st day of December and June 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 as of the close of business on the 15 th 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. PAYMENT OF AND SECURITY FOR THE BONDS The Bonds are general obligations of the City and the unlimited taxing powers of the City are irrevocably pledged for their payment. Upon issuance of the Bonds, the City will levy taxes for the years and in amounts sufficient to provide 100% of annual principal and interest due on all the Bonds. If, however, the amount credited to the debt service fund for payment of the Bonds is insufficient to pay principal and interest, whether from transfers or from original levies, the City must use funds in its treasury and is required to levy ad valorem taxes upon all taxable property in the City without limit as to rate or amount sufficient to pay the debt service deficiency. Nothing in the resolution authorizing the Bonds prohibits or limits the ability of the City to use legally available moneys other than the proceeds of the general ad valorem property taxes levied as described in the preceding paragraph to pay all or any portion of the principal of or interest on the Bonds. If and to the extent such other legally available moneys are used to pay the principal of or interest on the Bonds, the City may, but shall not be required to, (a) reduce the amount of taxes levied for such purpose, as described in the preceding paragraph; or (b) use proceeds of taxes levied, as described in the preceding paragraph, to reimburse the fund or account from which such other legally available moneys are withdrawn for the amount withdrawn from such fund or account to pay the principal of or interest on the Bonds. The City s obligation to pay the principal of and interest on the Bonds is on a parity with the City s obligation to pay the principal of and interest on any other of its general obligation debt secured by a covenant to levy taxes within the City, including any such debt issued or incurred after the issuance of the Bonds. The resolution authorizing the Bonds does not restrict the City s ability to issue or incur additional general obligation debt, although issuance of additional general obligation debt is subject to the same constitutional and statutory limitations that apply to the issuance of the Bonds. For a further description of the City s outstanding general obligation debt upon issuance of the Bonds and the annual debt service on the Bonds, see DIRECT DEBT under CITY INDEBTEDNESS herein. For a description of certain constitutional and statutory limits on the issuance of general obligation debt, see DEBT LIMIT under CITY INDEBTEDNESS herein. BOOK-ENTRY-ONLY ISSUANCE The information contained in the following paragraphs of this subsection Book-Entry-Only System has been extracted from a schedule prepared by Depository Trust Company ( DTC ) entitled SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING BOOK-ENTRY-ONLY ISSUANCE. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. The Depository Trust Company ( DTC ), New York, NY, will act as securities depository for the securities (the Securities ). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. 2

7 (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC s participants (the Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry 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 (the Indirect Participants ). DTC has Standard & Poor s rating: 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 Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC s records. The ownership interest of each actual purchaser of each Security (the Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. 3

8 Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co., nor any other DTC nominee, will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date identified in a listing attached to the Omnibus Proxy. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the City or Agent, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, Agent, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC, is the responsibility of the City or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant s interest in the Securities, on DTC s records, to Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC s records and followed by a book-entry credit of tendered Securities to Remarketing Agent s DTC account. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the City or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. FUTURE FINANCING The City anticipates no additional borrowings within 90 days of the date of this Official Statement. LITIGATION The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City s ability to meet its financial obligations. 4

9 DEBT PAYMENT HISTORY The City knows of no instance in which it has defaulted in the payment of principal or interest on its debt. LEGALITY The Bonds are subject to approval as to certain matters by Ahlers & Cooney, P.C. of Des Moines, Iowa as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement and will not pass upon its accuracy, completeness or sufficiency. Bond Counsel has not examined, nor attempted to examine or verify, any of the financial or statistical statements or data contained in this Official Statement, and will express no opinion with respect thereto. The FORM OF LEGAL OPINION as set out in APPENDIX A to this Official Statement, will be delivered at closing. The legal opinion to be delivered concurrently with the delivery of the Bonds expresses the professional judgment of the attorneys rendering the opinion as to legal issues expressly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgment, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. There is no bond trustee or similar person to monitor or enforce the provisions of the resolutions for the Bonds. The owners of the Bonds should, therefore, be prepared to enforce such provisions themselves if the need to do so arises. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the City and certain other public officials to perform the terms of the resolutions for the Bonds) may have to be enforced from year to year. The obligation to pay general ad valorem property taxes is secured by a statutory lien upon the taxed property, but is not an obligation for which a property owner may be held personally liable in the event of a deficiency. The owners of the Bonds cannot foreclose on property within the boundaries of the City or sell such property in order to pay the debt service on the Bonds. See LEVIES AND TAX COLLECTIONS herein, for a description of property tax collection and enforcement. In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in the Bond Counsel s opinion. The opinion will state, in part, that the obligation of the City with respect to the Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors rights heretofore or hereafter enacted to the extent constitutionally applicable, to the exercise of judicial discretion in appropriate cases and to the exercise by the State and its governmental bodies of the police power inherent in the sovereignty of the State and to the exercise by the United States of America of the powers delegated to it by the Constitution of the United States of America. TAX EXEMPTION AND RELATED CONSIDERATIONS Federal tax law contains a number of requirements and restrictions that apply to the Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond or note proceeds and facilities financed with bond or note proceeds, and certain other matters. The City has covenanted to comply with all requirements that must be satisfied in order for the interest on the Bonds to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest on the Bonds to become includable in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. Subject to the City s compliance with the above-referenced covenants, under present law, in the opinion of Bond Counsel, the interest on the Bonds is excluded from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), 5

10 such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations. The interest on the Bonds is not exempt from present Iowa income taxes. Ownership of the Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Bonds. Prospective purchaser of the Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. Prospective purchaser of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective purchaser of the Bonds should consult their tax advisors as to collateral federal income tax consequences. Not Qualified Tax-Exempt Bonds: The City will NOT designate the Bonds as qualified tax-exempt obligations under Section 265(b)(3) of the Code; therefore the Bonds will NOT be bank qualified. Original Issue Premium: The initial public offering price of the Bonds maturing in 2014 through 2023 (the Premium Bonds ) may be greater than the amount of such Bonds at maturity. An amount equal to the difference between the initial public offering price of the Premium Bonds (assuming that a substantial amount of the Premium Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes a premium to the initial purchaser of such Premium Bonds. The basis for federal income tax purposes of the Premium Bonds in the hands of such initial purchaser must be reduced each year by the amortizable bond or note premium, although no federal income tax deduction is allowed as a result of such reduction in basis for amortizable bond or note premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to be recognized for federal income tax purposes upon a sale or other taxable disposition of the Premium Bonds. The amount of premium which is amortizable each year by an initial purchaser is determined by using such purchaser s yield to maturity. Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond or note premium on Premium Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. RELATED TAX MATTERS The Service has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Bonds. If an audit is commenced, under current procedures the Service may treat the City as a taxpayer and the bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome. There are or may be pending in the Congress of the United States, legislative proposals, including some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters referred to in this section or affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to Bonds issued prior to enactment. Prospective purchaser of the Bonds should consult their own tax advisors regarding any pending or proposed tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal or state tax legislation. Opinion: Bond Counsel s opinion is not a guarantee of a result, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the City described in this section. No ruling has been sought from the Service with respect to the matters 6

11 addressed in the opinion of Bond Counsel and Bond Counsel s opinion is not binding on the Service. Bond Counsel assumes no obligation to update its opinion after the issue date to reflect any further action, fact or circumstance, or change in law or interpretation, or otherwise. 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. It cannot be predicted whether or in what form any such proposals might be enacted or whether if enacted it would apply to bonds issued prior to enactment. 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 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. It is possible that legislation will be proposed or introduced that could result in changes in the way that tax exemption is calculated, or whether interest on certain securities are exempt from taxation at all. Prospective purchaser should consult with their own tax advisors regarding any pending or proposed federal income tax legislation. The likelihood of any pending or proposed legislation being enacted or whether the proposed terms will be altered or removed during the legislative process cannot be reliably predicted. The opinion 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. RATING The Bonds are rated AAA by Standard and Poor s ( S&P ). S&P also maintains a rating of AAA on the City s currently outstanding long-term general obligation debt. In addition, Moody s Investors Service, Inc. ( Moody s ) maintains a rating of Aaa on the City s currently outstanding long-term general obligation debt. However, the City did not request a rating from Moody s on the Bonds. Such ratings reflect only the views of the rating agencies and any explanation of the significance of such ratings may only be obtained from the respective rating agency. There is no assurance that such ratings will continue for any period of time or that they will not be revised or withdrawn. Any revision or withdrawal of the ratings may have an effect on the market price of the Bonds. FINANCIAL ADVISOR The City has retained Public Financial Management, Inc., Des Moines, Iowa as Financial Advisor in connection with the preparation of the issuance of the Bonds. In preparing the Official Statement, the Financial Advisor has relied on government officials, and other sources to provide accurate information for disclosure purposes. The Financial Advisor is not obligated to undertake, and has not undertaken, an independent verification of the accuracy, completeness, or fairness of the information contained in the Official Statement. Public Financial Management, Inc. is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. CONTINUING DISCLOSURE In order to assist bidders in complying with paragraph (b)(5) of the Rule, the City will undertake, pursuant to the resolution for the Bonds and the Continuing Disclosure Certificate, to provide certain annual financial information and notices of certain events (the Disclosure Covenants ). The details of these undertakings are set forth in 7

12 APPENDIX C of this Official Statement. The Continuing Disclosure Certificate will be delivered at closing, and any failure on the part of City to deliver the same shall relieve the Purchaser of its obligation to purchase the Bonds. The City inadvertently failed to comply with a previous continuing disclosure undertaking in accordance with the reporting requirements of paragraph (f)(3) of the Rule. While the required tables were provided in accordance to the Rule (within 210 days after the end of the fiscal year), the audited financial statements for the year ending June 30, 2009 and June 30, 2010 were not timely filed. On June 15, 2011, the City filed the outstanding audited financial statements for the year ending June 30, 2010 in accordance with the Rule and is now compliant. On April 2, 2012, the Council adopted a Post-Issuance Compliance Policy, pursuant to which a Compliance Officer was assigned to be primarily responsible for overseeing the City s compliance with the continuing disclosure undertaking. The City has taken steps to assure future compliance with its Disclosure Covenants and has filed timely for both the years ending June 30, 2011 and June 30, Breach of the Disclosure Covenants 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 Disclosure Covenants, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the City to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. SALE AT COMPETITIVE BIDDING After competitive bids were received on July 22, 2013, Hutchinson, Shockey, Erley& Co. was awarded the Bonds for an aggregate price of $4,468, CERTIFICATION The City has authorized the distribution of this Official Statement for use in connection with the initial sale of the Bonds. I have reviewed the information contained within the Official Statement prepared on behalf of the City of West Des Moines, Iowa, by Public Financial Management, Inc., Des Moines, Iowa, and said Official Statement does not contain any material misstatements of fact nor omission of any material fact regarding the issuance of the $4,385,000 General Obligation Bonds, Series 2013A. CITY OF WEST DES MOINES, IOWA /s/ Tim Stiles, Finance Director 8

13 CITY PROPERTY VALUES IOWA PROPERTY VALUATIONS In compliance with Section of the Code of Iowa, the State Director of Revenue annually directs the county auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The Dallas, Madison, Polk and Warren County Auditors adjusted the final Actual Values for The reduced values, determined after the application of rollback percentages, are the taxable values subject to tax levy. For assessment year 2012, the taxable value rollback rate was % of actual value for residential property; % of actual value for agricultural property; and 100% of actual value for commercial, industrial, railroad and utility property. The Legislature s intent has been to limit the growth of statewide taxable valuations for the specific classes of property to 4% annually. Political subdivisions whose taxable values are thus reduced or are unusually low in growth are allowed to appeal the valuations to the State Appeal Board, in order to continue to fund present services. 1/1/2012 VALUATIONS (Taxes payable July 1, 2013 to June 30, 2014) 100% Actual Value Taxable Value (With Rollback) Residential $3,664,271,688 $1,906,869,339 Commercial 1,924,504,365 1,924,504,365 Industrial 34,578,815 34,578,815 Railroad 2,690,407 2,690,407 Utilities w/o Gas & Electric 11,137,131 11,137,131 Gross valuation $5,637,182,406 $3,879,780,057 Less military exemption (3,806,652) (3,806,652) Net valuation $5,633,375,754 $3,875,973,405 TIF increment (used to compute debt service levies and constitutional debt limit) $394,337,882 1) $394,337,882 2) Taxed separately: Ag. Land $8,800,977 ) $5,356,415 ) Ag. Buildings $252,540 $151,357 Gas & Electric Utilities $73,234,418 $47,684,744 1) Excludes $190,623 of TIF Increment Ag Land valuation 2) Excludes $32,560 of Taxable TIF Increment Ag Land valuation GROSS TAXABLE VALUATION BY CLASS OF PROPERTY 1) Taxable Valuation Percent Total Residential $1,906,869, % Commercial, Industrial and all Utilities 2,017,905, % Railroad 2,690, % Total Gross Taxable Valuation $3,927,464, % 1) Includes all Utilities but excludes Taxable TIF Increment, Ag. Land and Ag. Buildings. 9

14 TREND OF VALUATIONS Assessment Year Payable Fiscal Year 100% Actual Valuation Taxable Valuation (With Rollback) Taxable TIF Increment $5,885,335,010 $3,552,031,672 $424,575, ,998,691,853 3,720,483, ,625, ,103,995,127 3,787,818, ,950, ,047,924,164 3,760,753, ,186, ,110,192,194 3,923,658, ,337,882 The 100% Actual Valuations, before rollback, and after the reduction of military exemption, include Ag. Land, Ag Buildings, TIF Increment and Gas & Electric Utilities. The Taxable Valuations, with the rollback and after the reduction of military exemption include Gas & Electric Utilities and exclude Ag. Land, Ag. Buildings and Taxable TIF Increment. Iowa cities certify operating levies against Taxable Valuation excluding Taxable TIF Increment and debt service levies are certified against Taxable Valuation including the Taxable TIF Increment. PROPERTY TAX ASSESSMENTS In compliance with Section of the Code of Iowa, as amended, the State Director of Revenue annually directs all county auditors to apply prescribed percentages to the assessments of certain categories of real property. The final values, called Actual Valuation, are then adjusted by the County Auditor. Assessed or Taxable Valuations subject to tax levy is then determined by the application of State determined rollback percentages, principally to residential and commercial property. Beginning in 1978, the State required a reduction in Actual Valuation to reduce the impact of inflation on its residents. The resulting value is defined as the Assessed or Taxable Valuation. The rollback percentages for properties are as follows: Fiscal Year Agricultural Residential Railroads Commercial % % % % % % % % % % % % % % % % % % % % Property is assessed on a calendar year basis. The assessments finalized as of January 1 of each year are applied to the following fiscal year. For example, the assessments finalized on January 1, 2012 are used to calculate tax liability for the tax year starting July 1, 2013 through June 30,

15 LARGER TAXPAYERS Set forth in the following table are the persons or entities which represent larger taxpayers within the boundaries of the City, as provided by the Polk, Dallas, Warren and Madison County Auditor s Offices. No independent investigation has been made of and no representation is made herein as to the financial condition of any of the taxpayers listed below or that such taxpayers will continue to maintain their status as major taxpayers in the City. The City s mill levy is uniformly applicable to all of the properties included in the table, and thus taxes expected to be received by the City from such taxpayers will be in proportion to the assessed valuations of the properties. The total tax bill for each of the properties is dependent upon the mill levies of the other taxing entities which overlap the properties. 1/1/2012 Taxpayer Type of Property Taxable Valuation Wells Fargo Home Mortgage Inc. Commercial $188,121,200 GGP Jordan Creek LLC Commercial 184,471,370 Valley West DM Commercial 67,650,000 Aviva Real Property Holdings, LLC Commercial 54,939,070 Mid-American Energy Co. Utility 47,342,162 Three Fountains LLC Commercial 46,140,000 Regency West Office Partners LLC Commercial 41,989,000 IFBF Property Management Commercial 40,250,700 CCOP I LLC Commercial 33,793,390 MRES West Glen Holdings LP Commercial 32,591,927 11

16 LEGISLATION From time to time, legislative proposals are pending in Congress and the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described herein. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for taxes levied by the City or have an adverse impact on the future tax collections of the City. Purchaser of the Bonds should consult their tax advisors regarding any pending or proposed federal or state tax legislation. The opinion expressed by Bond Counsel are based upon existing legislation as of the date of issuance and delivery of the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending federal or state tax legislation. On April 17, 2013, the Iowa General Assembly passed Senate File 295, which reduces taxes on commercial, industrial, multi-unit residential and telecommunications property and limits growth in assessed value for residential and agricultural property down from 4% to 3%. Valuations, for property tax purposes, on commercial, industrial, multi-unit residential and telecommunications properties, will be reduced from 100% to 95% retroactive to January 1, 2013 for taxes payable in fiscal year Valuations from January 2014 forward shall be at 90%. The legislature has expressed intent to appropriate money to back fill some of the tax revenues lost due to this legislation. The payments would total $78.8 million in fiscal year 2015, grow to $162.8 million in fiscal year 2016 and then be $154.1 million for fiscal year 2017 and each fiscal year thereafter. It is impossible to determine whether Iowa will be able to sustain such payments, whether future appropriations will in fact be made, or to quantify the impact the levy reductions will have upon the Issuer s ability to provide essential services and to undertake future capital projects. Unless backfill payments are sufficient to offset these reductions, or unless property values increase in an amount sufficient to offset these reductions, property tax revenues received by the Issuer starting in fiscal year 2015 and after are projected to be less than what otherwise would have been received under the previous methodology. Iowa Code section 76.2 provides that when an Iowa political subdivision issues general obligation debt: 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 the applicable period of time specified in section 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. Iowa Code section 76.1 provides that the annual levy shall be sufficient to pay the interest and approximately such portion of the principal of the bonds as will retire them in a period not exceeding twenty years from the date of issue, except for certain bonds issued for disaster purposes and bonds issued to refund or refinance bonds issued for such disaster purposes which may mature and be retired in a period not exceeding thirty years from date of issue. 12

17 DEBT LIMIT CITY INDEBTEDNESS Article XI, Section 3 of the State of Iowa Constitution limits the amount of debt outstanding at any time of any county, municipality or other political subdivision to no more than 5% of the actual value of all taxable property within the corporate limits, as taken from the last state and county tax list. The debt limit for the City, based on its 2012 valuation currently applicable to the fiscal year is as follows: DIRECT DEBT 2012 Actual Valuation of Property $6,113,998,846 Less: Military Exemption (3,806,652) Subtotal $6,110,192,194 Legal Debt Limit of 5% 0.05 Legal Debt Limit $305,509,610 Less: G. O. Debt Subject to Debt Limit (86,265,000) Less: Developer Rebate Agreements (1,116,885) 1) Less: Other Miscellaneous Debt (2,604,750) 2) Net Debt Limit $215,522,975 1) As reported by the City pursuant to development agreements for urban renewal projects under the authority of Iowa Code Chapter ) Other Miscellaneous Debt includes capital lease obligations and installment contracts. General Obligation Debt Paid by Property Taxes (Includes the Bonds) Date of Issue Original Amount Purpose Final Maturity Principal Outstanding As of 08/21/13 9/03D $12,000,000 Corporate Purpose 6/14 $1,100,000 6/04A 6,000,000 Capital Improvements 6/14 195,000 4/05A 3,055,000 Refunding (1996 Bonds) 6/13 0 1) 11/09A 7,510,000 Refunding (2001C Bonds) 6/15 1,420,000 12/09B 6,500,000 Corporate Purpose 6/15 470,000 3/10A 6,050,000 Refunding (2002C Bonds) 6/20 4,850,000 4/10B 975,000 Refunding (2001D Bonds) 6/14 255,000 6/10C 7,000,000 Corporate Purpose 6/20 5,395,000 8/11A 6,900,000 Corporate Purpose 6/25 5,310,000 5/12A 2,610,000 Refunding (2006A Bonds) 6/18 2,610,000 5/12B 11,355,000 Refunding (2003D & 2004A Bonds) 6/21 11,355,000 6/12D 7,520,000 Corporate Purpose 6/26 7,270,000 8/13A 4,385,000 Corporate Purpose & Refunding 6/24 4,385,000 Subtotal $44,615,000 1) The 2014 through 2015 maturities are being current refunded by the Bonds on August 22,

18 General Obligation Debt Abated by Tax Increment Revenues Date of Issue Original Amount Purpose Final Maturity Principal Outstanding As of 08/21/13 12/07A $2,550,000 Jordan Creek 6/19 $1,430,000 3/08A 9,860,000 Refunding 6/14 1,785,000 6/08B 7,000,000 Mills Parkway (AVIVA) 6/20 4,390,000 1) 3/10A 25,400,000 Refunding 2003A Bonds 6/19 19,200,000 4/10B 1,530,000 Refunding C Bonds 6/14 400,000 8/10D 5,000,000 Mills Parkway (Microsoft) 6/29 4,950,000 8/11B 11,270,000 Refunding (Wells Fargo) 6/18 9,495,000 Subtotal $41,650,000 1) The City has advance funded $2,510,000 of the Series 2008B Bonds maturing 2021 through 2022 maturities and a portion of the 2020 maturity. Funds are being held in escrow until the June 1, 2016 call date. Total General Obligation Debt Subject to Debt Limit: $86,265,000 Annual Fiscal Year Debt Service Payments General Obligation Debt Paid by Property Taxes (Includes the Bonds) Fiscal Year Current Outstanding The Bonds Total Outstanding Principal Principal and Interest Principal Principal and Interest Principal Principal and Interest FY $6,005,000 $7,501,415 $1,080,000 $1,161,947 $7,085,000 $8,663,362 FY ,340,000 6,646, , ,760 6,135,000 7,524,791 FY ,450,000 6,550, , ,860 5,700,000 6,868,016 FY ,010,000 5,898, , ,860 5,270,000 6,221,366 FY ,445,000 5,130, , ,660 4,710,000 5,452,904 FY ,960,000 4,462, , ,360 4,230,000 4,785,054 FY ,470,000 3,815, , ,260 3,745,000 4,134,879 FY ,565,000 1,779, , ,010 1,850,000 2,100,379 FY ,035,000 1,191, , ,460 1,330,000 1,513,679 FY ,065,000 1,189, , ,610 1,365,000 1,508,210 FY ,100,000 1,191, , ,610 1,410,000 1,511,085 FY ,130,000 1,186,050 1,130,000 1,186,050 FY , , , ,650 Total $40,230,000 $4,385,000 $44,615,000 14

19 General Obligation Debt Abated by Tax Increment Revenues Fiscal Year Total Mills Parkway Total Jordan Creek Total G. O. TIF Debt Principal Principal and Interest Principal 15 Principal and Interest Principal Principal and Interest FY $4,340,000 $5,022,129 $3,405,000 $4,170,921 $7,745,000 $9,193,050 FY ,410,000 2,983,623 3,480,000 4,174,328 5,890,000 7,157,951 FY ,755,000 3,275,548 3,220,000 3,775,971 5,975,000 7,051,519 FY ,085,000 3,440,673 3,360,000 3,788,034 6,445,000 7,228,707 FY ,175,000 3,453,291 3,510,000 3,804,234 6,685,000 7,257,525 FY ,235,000 1,422,661 3,655,000 3,809,344 4,890,000 5,232,005 FY ,000 1,052, ,000 1,052,931 FY , , , ,006 FY , , , ,156 FY , , , ,006 FY , , , ,606 FY , , , ,469 FY , , , ,825 FY , , , ,400 FY , , , ,600 FY , , , ,200 Total $21,020,000 $20,630,000 $41,650,000 OTHER DEBT West Des Moines Water Works The West Des Moines Water Works (the Water Works ) is a related organization to the City. Governance of the Water Works is vested in a five-member Board appointed by the Mayor of West Des Moines with approval of the City Council. Trustees serve for six-year staggered terms. The Board has complete control of the Water Works management, and, therefore, is responsible for selection of management personnel and all financial matters. The authority to adopt the annual budget, to incur debt and to fix rates and charges is vested in the Board. The Water Works has revenue debt payable solely from the net revenues of the utility as follows: Date of Issue Original Amount Purpose Final Maturity Principal Outstanding As of 08/21/13 4/07 $7,185,000 Refunding 12/18 $4,820,000 2/11 4,357,547 Refunding Series 2004B (DMWW) 12/17 3,092,795 10/12 7,570,000 Water Improvements 12/23 7,545,000 10/12 3,132,119 Refunding - Series 2006 (DMWW) 12/25 3,132,119 Total $18,589,914 Des Moines Metropolitan Wastewater Reclamation Authority Financing Agreements The City is a member of the Des Moines Metropolitan Wastewater Reclamation Authority ( WRA ) and has entered into a financing agreement with the WRA to provide for the City s share of capital contribution for the construction and ongoing expansion of a metropolitan waste water system. The City is responsible for a portion of the WRA sewer revenue debt payable from the revenues of their Sewer System; its responsibilities pursuant to the WRA Financing Agreement stand as nearly as practicable on a parity and equality of rank with the City s direct sewer revenue bonds and parity obligations. The City s portion of outstanding WRA debt is as follows:

20 Date of Issue Original Amount Purpose Final Maturity Principal Outstanding As of 08/21/13 6/95 $1,456,690 Sewer Revenue (SRF Loan No. 4) 6/15 $157,990 1) 6/95 909,954 Sewer Revenue (SRF Loan No. 6) 6/16 192,780 2) 6/96 499,446 Sewer Revenue (SRF Loan No. 7) 6/18 165,483 3) 11/04B 13,187,098 Sewer Revenue Bonds 6/14 226,773 4) 12/06 7,669,152 Sewer Revenue Bonds 6/36 6,539,842 5) 6/08A 3,152,016 Sewer Improvements (SRF Loan) 6/39 2,612,760 6) 6/08B 2,069,810 Sewer Improvements (SRF Loan) 6/39 1,774,535 7) 6/08D 834,220 Sewer Improvements (SRF Loan) 6/38 674,178 8) 3/09B 2,644,320 Sewer Improvements (SRF Loan) 6/39 2,273,143 9) 7/09C 2,921,000 Sewer Improvements (SRF Loan) 6/39 2,489,274 10) 4/10A 1,604,800 Sewer Improvements (SRF Loan) 6/40 1,380,400 11) 4/10B 2,222,500 Sewer Improvements (SRF Loan) 6/40 1,939,965 12) 6/10C-1 249,000 Sewer Improvements (SRF Loan) 6/32 219,470 13) 6/10C-2 2,676,750 Sewer Improvements (SRF Loan) 6/32 2,266,944 14) 3/11B 4,944,583 Sewer Improvements (SRF Loan) 6/41 4,536,725 15) 5/11A 7,000,512 Sewer Improvements (SRF Loan) 6/42 6,587,290 16) 5/11C 1,735,638 Sewer Improvements (SRF Loan) 6/41 1,594,989 17) 12/11D 2,466,000 Sewer Improvements (SRF Loan) 6/43 2,444,688 18) 5/12B 814,220 Sewer Improvements (SRF Loan) 6/42 802,814 19) 5/12C 1,899,071 Sewer Improvements (SRF Loan) 6/43 1,976,220 20) 5/12D 738,527 Sewer Improvements (SRF Loan) 6/42 768,420 21) 11/12E 3,563,556 Sewer Improvements (SRF Loan) 6/43 3,563,556 22) 11/12F 413,720 Sewer Improvements (SRF Loan) 6/43 413,720 23) 11/12G 3,734,940 Sewer Improvements (SRF Loan) 6/44 3,734,940 24) 4/13A 845,383 Sewer Improvements (SRF Loan) 6/43 845,383 25) 6/13B 10,208,317 Sewer Revenue Bonds 6/34 10,208,317 26) Total $60,390,599 The amounts above represent the City s share of the principal payments of the various issues. Other participating communities within the WRA area pay the remaining amounts. Flow-based allocations are subject to change on an annual basis; as such the amount outstanding may be greater than the amount issued due to fluctuations in flow. NOTES: 1) The City s share of the WRA s SRF Loan No. 4 outstanding in the amount of $427,000. 2) The City s share of the WRA s SRF Loan No. 6 outstanding in the amount of $2,380,000. 3) The City s share of the WRA s SRF Loan No. 7 outstanding in the amount of $2,043,000. 4) The City s flow-based share of the WRA s Series 2004B outstanding in the amount of $1,310,000. 5) The City s flow-based share of the WRA s Series 2006 outstanding in the amount of $34,145,000. 6) The City s flow-based share of the WRA s Series 2008A SRF loan outstanding in the amount of $15,390,000. 7) The City s flow-based share of the WRA s Series 2008B SRF loan outstanding in the amount of $6,125,000. 8) The City s flow-based share of the WRA s Series 2008D SRF loan outstanding in the amount of $2,327,000. 9) The City s flow-based share of the WRA s Series 2009B SRF loan outstanding in the amount of $7,846, ) The City s flow based share of the WRA s Series 2009C SRF loan outstanding in the amount of $8,592, ) The City s flow based share of the WRA s Series 2010A SRF loan outstanding in the amount of $8,131, ) The City s flow based share of the WRA s Series 2010B SRF loan outstanding in the amount of $6,696, ) The City s flow based share of the WRA s Series 2010C-1 SRF loan outstanding in the amount of $1,999,

21 NOTES (Continued): 14) The City s flow based share of the WRA s Series 2010C-2 SRF loan outstanding in the amount of $20,648, ) The City s flow based share of the WRA s Series 2011A SRF loan outstanding in the amount of $59,999, ) The City s flow based share of the WRA s Series 2011B SRF loan outstanding in the amount of $15,659, ) The City s flow based share of the WRA s Series 2011C SRF loan outstanding in the amount of $9,395, ) The City s flow based share of the WRA s Series 2011D SRF loan outstanding in the amount of $14,400, ) The City s flow based share of the WRA s Series 2012B SRF loan outstanding in the amount of $2,771, ) The City s flow based share of the WRA s Series 2012C SRF loan outstanding in the amount of $18,000, ) The City s flow based share of the WRA s Series 2012D SRF loan outstanding in the amount of $6,999, ) The City s flow based share of the WRA s Series 2012E SRF loan outstanding in the amount of $12,300, ) The City s flow based share of the WRA s Series 2012F SRF loan outstanding in the amount of $1,428, ) The City s flow based share of the WRA s Series 2012G SRF loan outstanding in the amount of $22,000, ) The City s flow based share of the WRA s Series 2013A SRF loan outstanding in the amount of $7,700, ) The City s flow based share of the WRA s Series 2013B outstanding in the amount of $56,420,000. INDIRECT GENERAL OBLIGATION DEBT 1/1/2012 Taxable Portion of Taxable Valuation Percent City s Proportionate Taxing District Valuation 1) Within City In City G.O. Debt 2) Share Polk County $20,913,609,432 $2,791,726, % $250,177,000 $33,398,630 Dallas County 4,445,552,470 1,529,392, % 12,655,000 4,353,320 Warren County 1,899,385,908 2,301, % 153, Madison County 762,043,151 83, % 1,066, West Des Moines CSD 4,355,728,442 2,789,114,241 3) 64.03% 41,275,000 26,428,383 Waukee CSD 2,955,389,487 1,533,853,614 4) 51.90% 102,770,000 53,337,630 Des Moines ISD 7,319,732,459 2,712, % 0 0 Norwalk CSD 489,300,148 2,511,378 5) 0.51% 17,580,000 89,658 Van Meter CSD 193,020, ,112 6) 0.39% 10,810,000 42,159 Winterset CSD 432,287,033 83,719 7) 0.02% 10,375,000 2,075 Urbandale-Windsor Heights Sanitary Sewer 385,453, , % 0 0 Des Moines Area Community College 38,538,891,860 4,323,503, % 72,390,000 8,122,158 City share of total overlapping debt $125,774,305 1) Taxable Valuation is less military exemption and includes Ag. Land & Buildings, Taxable TIF Increment and all Utilities. 2) Includes general obligation bonds, PPEL notes, certificates of participation and new jobs training certificates. 3) West Des Moines CSD Portion of Taxable Valuation Within the City includes city-exempt Phase In and Phase In Ag valuations in the amount of $84,161. 4) Waukee CSD Portion of Taxable Valuation Within the City includes city-exempt Phase In and Phase In Ag valuations in the amount of $4,864,006. 5) Norwalk CSD Portion of Taxable Valuation Within the City includes city-exempt Phase In and Phase In Ag valuations in the amount of $210,079. 6) Van Meter CSD Portion of Taxable Valuation Within the City includes city-exempt Phase In and Phase In Ag valuations in the amount of $328,503. 7) Winterset CSD Portion of Taxable Valuation Within the City includes city-exempt Phase In and Phase In Ag valuations in the amount of $31,

22 DEBT RATIOS Direct Debt Debt/Actual Market Value Debt/56,609 2) ($6,110,192,194) 1) Population Total General Obligation Debt $86,265, % $1, City s share of overlapping debt $125,774, % $2, ) Based on the City s 1/1/2012 Actual Valuation; includes Ag Land, Ag Buildings, all Utilities and TIF Increment. 2) Population based on the City s 2010 U.S. Census. TAX RATES Polk County Resident FY FY FY FY FY Taxing District $/$1,000 $/$1,000 $/$1,000 $/$1,000 $/$1,000 Polk County City of West Des Moines Des Moines ISD West Des Moines CSD Des Moines Area Comm. College Broadlawns Hospital County Assessor County Ag Extension Des Moines Regional Transit Auth State of Iowa Total Tax Rate: Des Moines ISD Resident West Des Moines CSD Resident Dallas County Resident FY FY FY FY FY Taxing District $/$1,000 $/$1,000 $/$1,000 $/$1,000 $/$1,000 Dallas County City of West Des Moines Waukee CSD Van Meter CSD Des Moines Area Comm. College Dallas County Hospital County Assessor County Ag. Extension Des Moines Regional Transit Auth State of Iowa Total Tax Rate: Waukee CSD Resident Van Meter CSD Resident

23 Warren County Resident FY FY FY FY FY Taxing District $/$1,000 $/$1,000 $/$1,000 $/$1,000 $/$1,000 Warren County City of West Des Moines Norwalk CSD Des Moines Area Comm. College County Assessor County Ag. Extension Des Moines Regional Transit Auth State of Iowa Total Tax Rate: Norwalk CSD Resident Madison County Resident 1) FY ) FY Taxing District $/$1,000 $/$1,000 Madison County City of West Des Moines Winterset CSD Des Moines Area Comm. College County Assessor County Ag. Extension Des Moines Regional Transit Auth State of Iowa Total Tax Rate: Winterset CSD Resident ) The City first levied taxes in Madison County in the FY tax year. NOTE: FY tax rates were not available as of the date of this Official Statement. LEVIES AND TAX COLLECTIONS Fiscal Year Levy Collected During Collection Year Percent Collected $56,517,515 $56,443, % ,298,152 56,111, % ,565,057 58,369, % ,163, In process of collection ,593, In process of collection Collections include delinquent taxes from all prior years. Taxes in Iowa are delinquent each October 1 and April 1 and a late payment penalty of 1% per month of delinquency is enforced as of those dates. If delinquent taxes are not paid, the property may be offered at the regular tax sale on the third Monday of June following the delinquency date. Purchaser at the tax sale must pay an amount equal to the taxes, special assessments, interest and penalties due on the property and funds so received are applied to taxes. A property owner may redeem from the regular tax sale but, failing redemption within three years, the tax sale purchaser is entitled to a deed which in general conveys the title free and clear of all liens except future tax installments. 19

24 LEVY LIMITS A city s general fund tax levy is limited to $8.10 per $1,000 of taxable value, with provision for an additional $0.27 per $1,000 levy for an emergency fund which can be used for general fund purposes (Code of Iowa, Chapter 384, Division I). Cities may exceed the $8.10 limitation upon authorization by a special levy election. Further, there are limited special purpose levies, which may be certified outside of the above-described levy limits (Code of Iowa, Section ). The amount of the City s general fund levy subject to the $8.10 limitation is $8.10 for Fiscal Year Currently, the City does levy $0.27 for an emergency fund. In addition, the City does levy outside of the above described levy limits for insurance expense and employee benefits. Debt service levies are not limited. FUNDS ON HAND (Cash and Investment as of April 30, 2013) General Fund $24,723,960 Special Revenue 42,250,114 Debt Service 9,520,486 Capital Projects 18,575,477 Trust & Agency 756,427 Internal Service 16,213,769 Enterprise 35,572,287 Total Cash and Investments $147,612,520 20

25 THE CITY CITY GOVERNMENT The City of West Des Moines (the City ) is governed under a Mayor-council form of government which provides, by ordinance, for a City Manager to be appointed by the Council to serve as chief administrative officer for the City. The Mayor and the five Council Members are elected to four-year terms with the Mayor s and three Council Members terms expiring at the same time. The remaining two Council Member s terms expire two years later, thus ensuring continuity of experienced members. The City derives its revenue from property tax, utility revenue, other fees, and intergovernmental revenues and grants. A detailed functional accounting system operated on a modified accrual basis, allows accurate control of funds and facilities fiscal management and planning. The City operates on a July 1 through June 30 fiscal year. The budget development process begins in October and concludes in March for the fiscal year beginning the following July 1. The City staff is organized into ten departments. These departments in cooperation with the office of the City Manager, Finance, and City Attorney carry out the policy of the City Council and the business of the City. The Municipal Library and the Water Works are administered by separate boards. City departments consist of the following: Public Works (Engineering, Operations & Construction), Community and Economic Development, Development Services (Development Review & Building Inspection), Finance, Library, Emergency Medical and Communication Services, Police, Human Services, Parks and Recreation and Fire. EMPLOYEES AND PENSIONS The City has 336 full-time, 96 part-time, 220 seasonal/temporary and 44 paid-on-call employees, of which, all fulltime employees, except for the City Manager, sworn Firefighters and Police Officers are enrolled in the Iowa Public Employees Retirement System (the IPERS ) pension plan administered by the State of Iowa. The City is current in its obligation to IPERS, which has been as follows: $1,178,526 in Fiscal Year ; and $1,220,065 in Fiscal Year and $1,458,325 in Fiscal Year For sworn Firefighters and Police Officers, the City contributes to the Municipal Fire and Police Retirement System of Iowa (the Plan ), which is a cost sharing, multiple-employer defined benefit pension plan administered by a Board of Trustees. The Plan provides retirement, disability and death benefits which are established by State statute to plan members and beneficiaries. The Plan issues a publicly available financial report that includes financial statements and required supplementary information. Plan members are required to contribute 9.40% of earnable compensation. Under the Code of Iowa the employer s contribution rate cannot be less than 17% of earnable compensation. The City s contributions to the Plan for the years ended June 30, 2010, 2011 and 2012 were: $1,233,912; $1,445,739; and $1,881,373 respectively, which met the required minimum contribution for each year. OTHER POST EMPLOYMENT BENEFITS The City operates a single-employer retiree benefit plan which provides healthcare benefits for retirees and their spouses and dependents. There are active and retired members in the plan. Retired participants must be age 55 or older at retirement. The healthcare benefit plans are self-insured and are administered by a third party. Retirees under age 65 pay 102% of the full active employee premium rates. This results in an implicit subsidy and an OPEB liability. The contribution requirements of plan members are established and may be amended by the City. The City currently finances the retiree benefit plan on a pay-as-you-go basis. The City s annual OPEB cost is calculated based on the annual required contribution ( ARC ) of the City, an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding 21

26 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 City s annual OPEB cost for the year ended June 30, 2012, the amount actually contributed to the plan and changes in the City s net OPEB obligation: Annual required contribution, ARC $140,142 Interest on net OPEB obligation 23,275 Adjustment to annual required contribution (30,282) Annual OPEB cost 133,135 Contributions made (19,179) Increase in net OPEB obligation 113,956 Net OPEB obligation, beginning of year 465,501 Net OPEB obligation, end of year $579,457 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, 2012, the City contributed $19,179 to the plan. The City s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation as of June 30, 2012 are summarized as follows: Percentage of Net Fiscal Year Annual Annual OPEB OPEB Ended June 30 OPEB Cost Cost Contributed Obligation 2010 $230, % $415, , % 465, , % 579,457 As of July 1, 2010, the most recent actuarial valuation date for the period July 1, 2010 through June 30, 2012, the actuarial accrued liability was $1,367,807 with no actuarial value of assets, resulting in an unfunded actuarial accrued liability, UAAL, of $1,367,807. The covered payroll (annual payroll of active employees covered by the plan) was approximately $20,224,000, and the ratio of the UAAL to the covered payroll was 6.8%. As of June 30, 2012, there were no trust fund assets. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information in the section following the Bonds to Financial Statements, will present multiyear trend information about whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the plan as understood by the employer and the plan members and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. 22

27 As of the July 1, 2010 actuarial valuation date, the projected unit credit actuarial cost method was used. The actuarial assumptions include a 5% investment rate and 3% inflation rate based on the City s funding policy. The projected annual healthcare cost trend rate is 6.0%. The ultimate medical trend rate is 5.0%. The medical trend rate is reduced 1.0% each year until reaching the 5.0% ultimate trend rate. There were no benefit increases considered. Mortality rates are from the RP2000 Mortality Tables, applied on a gender-specific basis. Annual retirement and termination probabilities were developed from the Actuary s Pension Handbook. Projected claim costs of the healthcare plan are approximately $10,200 for retirees. The salary increase rate was assumed to be 3.5% per year. The UAAL is being amortized as a level dollar amount on an open basis over a period of 30 years. There are no audited financial statements for this plan. UNION CONTRACTS The City has six contracts with three unions representing 218 employees. The following are brief descriptions of the unions and their contracts. International Union of Operating Engineers (IUOE), Local 234: There are 52 employees from various departments within the City government represented by this union. The current contract expires June 30, West Des Moines Association of Professional Fire Fighters, Local 3586: These employees are from the Fire Department and their responsibilities include fire suppression, emergency, and fire inspection. The total number of employees covered by this bargaining unit is 33. The current contract expires June 30, West Des Moines Association of Professional Fire Fighters, EMT-Paramedics and EMT-Basics, Local 3586: These employees are from the Emergency Medical and Communication Services Department and their responsibilities include emergency care of victims of illness and injury. The total number of employees covered by this bargaining unit is 24. The current contract expires June 30, Police Teamsters, Local 238: There are 67 employees from the Police Department, including Animal Control, represented by this union. The current contract expires June 30, Westcom Teamsters, Local 238: There are 20 employees from Westcom represented by this union. The current contract will expire June 30, Library Teamsters, Local 238: There are 22 employees from the Library Department represented by this union. The current contract expires on June 30,

28 INSURANCE Type of Insurance Amount of Coverage Municipal General Liability: Bodily Injury, Personal Injury, Property $10,000,000 Damage, and Advertising Injury $10,000 Deductible Municipal Automobile Liability: Bodily Injury and Property Damage $10,000,000 Each Accident $10,000 Deductible Municipal Automobile Physical Damage: Comprehensive and Collision Coverage Varies per Vehicle $10,000 Deductible Public Officials Liability Coverage: $10,000,000 Each Claim and Aggregate $10,000 Deductible Law Enforcement Officers Liability: $10,000,000 $5,000 Deductible Employees Dishonesty Coverage: $1,000,000 $5,000 Deductible Computer Fraud: $1,000,000 $5,000 Deductible Commercial Property Coverage: Blanket Real and Personal Property Replacement Cost Agreed Amount $10,000 Deductible Sub-limits: Earthquake $3,000,000 2% of Loss Deductible Flood $1,500,000 $25,000 Deductible Valuable Papers and Records: Various Locations $250,000 $10,000 Deductible Blanket Extra Expense/Business Income $100,000 $10,000 Deductible EDP Hardware $4,045,000 $10,000 Deductible 24

29 LOCATION AND TRANSPORTATION GENERAL INFORMATION The City is located in central Iowa in Polk, Dallas, Warren and Madison Counties, adjacent to the western boundary of the City of Des Moines. Currently one of the fastest growing communities within the State, the City s 2010 census is 56,609 which represents a 78.6% increase from the 1990 census. Principal transportation opportunities are provided to the City by U.S. Highways 35, 80 and 235 and by two railroads the Chicago Northwestern Transportation Co., and the Des Moines Union Railway. Commercial airline service is available through the Des Moines International Airport located adjacent to the City s eastern border. LARGER EMPLOYERS A representative list of larger employers in the City is as follows: Employer Type of Business Approximate Number of Employees 1) Wells Fargo 2) Home Mortgage Financing 7,696 Hy-Vee Food Stores Grocery Stores 2,100 Kum & Go Convenience Store Chain 1,820 3) Aviva USA Insurance 1,457 West Des Moines CSD Education 1,309 Farm Bureau Insurance & Financial Insurance/Financial 955 City of West Des Moines Municipal Government 696 4) ADP Payroll Data Processing 550 Telligen Insurance 549 MetLife Insurance 534 GuideOne Insurance Company Insurance 519 Iowa Realty Co., Inc. 5) Realty 469 Sammons The Annuity Group Investments 466 Iowa Clinic Health Care Specialists 450 Mediacom Communications 436 American Equity Inv. Life Holding Co. Investment 400 Iowa Student Loan Student Loan Provider 400 ITA Group Performance Improvement 390 Turbine Fuel Technologies/Goodrich/Delevan 6) Engine Components 385 Sears Operations Center Company Operations Center 358 Unity Point 7) Hospital 350 Target Retail Stores 349 Mercy Medical Center West Lakes Medical Care 320 Walmart Retail 318 Lowe s Home Improvement Home Improvement Retail Stores 240 1) Includes full-time, part-time and seasonal employees. 2) Wells Fargo Home Mortgage and Wells Fargo Card Services have been merged into one organization for reporting purposes. 3) Includes all greater Des Moines area employees including the headquarters located within the City. 4) Includes paid on-call employees for the City. 5) Iowa Realty Co, Inc. includes Iowa Realty, Prudential First Realty, Iowa Title, and Midland Escrow Services, all part of Home Services of Iowa. 6) United Technologies Company, dba Turbine Fuel Technologies/Goodrich/Delevan. 7) Formerly known as Methodist West Hospital. Source: City of West Des Moines Community and Economic Development; The Greater Des Moines Partnership report dated April 16, 2013, and phone survey conducted June

30 BUILDING PERMITS City officials report the following construction activity as of June 30, Permits for the City are reported on a fiscal year basis. FY FY FY FY FY ) Single Family Homes: No. of new homes: Valuation: $29,823,115 $47,905,704 $40,561,930 $60,795,118 $84,783,829 Single Family Homes Additions & Alterations: No. of permits issued: Valuation: $4,018,102 $4,246,836 $4,161,396 $4,084,641 $6,150,626 Multiple Family Dwellings: No. of new buildings: Valuation: $74,450,890 $31,371,996 $29,876,070 $8,368,952 $68,197,127 Commercial/Industrial/Other: No. of new buildings: Valuation: $254,140,281 $4,352,231 $53,505,518 $64,742,384 $15,460,081 Commercial/Industrial/Other Additions & Alterations: No. of permits issued: Valuation: $18,235,673 $45,614,340 $27,185,204 $89,767,052 $63,109,827 Total Permits: 1,009 1,115 1,136 1,002 1,042 Total Valuations: $380,668,061 $133,491,107 $155,290,118 $227,758,147 $237,701,490 1) Includes activity from July 1, 2012 through June 30, 2013 U.S. CENSUS DATA Population Trend 1990 U.S. Census 31, U.S. Census 46, Special City Census 51, U.S. Census 56, U.S. Census 57,909* *This is an estimate from the U.S. Census Bureau Source: U.S. Census Bureau website and the Iowa Secretary of State website. UNEMPLOYMENT RATES City of Polk Dallas Warren Madison State of Annual Averages West Des Moines County County County County Iowa % 5.9% 4.8% 5.7% 6.6% 6.2% % 6.3% 5.0% 6.0% 7.1% 6.3% % 6.1% 4.8% 5.5% 6.4% 5.9% % 5.4% 4.3% 5.1% 5.9% 5.2% 2013 (Jan-April) 3.5% 5.3% 4.1% 5.3% 6.9% 4.9% Source: Iowa Workforce Development Center website. 26

31 EDUCATION Public education is provided to the City by the West Des Moines Community School District, Des Moines Independent Community School District, Waukee Community School District, Winterset Community School District, Norwalk Community School District and Van Meter Community School District and parochial schools. Continuing educational opportunities within commuting distance include Drake University (Des Moines), Grand View College (Des Moines), Upper Iowa University (West Des Moines), American Institute of Business (Des Moines), Des Moines Area Community College (Ankeny), Iowa State University (Ames) and Simpson College (Indianola). RETAIL SALES Presented below are retail sales statistics for the City for the period indicated: Year Ending Taxable Retail Sales Computed Tax Estimated Number of Businesses March 31, 2008 $1,397,818,852 $69,889,981 1,575 June 30, ,596,897,731 95,433,824 1,654 June 30, ,483,724,771 88,642,827 1,648 June 30, ,541,230,798 92,035,867 1,629 June 30, ,700,406, ,565,253 1,661 Source: Iowa Department of Revenue website. EFFECTIVE BUYING INCOME Effective Buying Income ( EBI ) for the City of West Des Moines, Dallas, Madison, Polk and Warren Counties and the State of Iowa as follows: Total EBI Median Household EBI Total Retail Sales Retail Sales Per Household City of West Des Moines $1,507,167,500 $48,063 $1,147,395,397 $48,405 Dallas County 1,672,562,500 49, ,535,112 28,728 Madison County 309,932,500 42, ,161,816 19,292 Polk County 9,663,230,000 43,639 7,140,515,280 41,034 Warren County 974,317,500 48, ,084,555 21,575 State of Iowa 59,694,507,500 38,089 44,629,676,496 36,106 Effective Buying Income Groups <$15,000-$34,999 $35,000-$74,999 $75,000 and Over City of West Des Moines 33.6% 41.4% 25.0% Dallas County 33.2% 40.8% 26.0% Madison County 41.0% 43.3% 15.7% Polk County 39.2% 40.9% 19.9% Warren County 33.1% 46.5% 20.4% State of Iowa 45.9% 39.8% 14.3% Source: The Claritas, Inc report 27

32 FINANCIAL SERVICES Residents of the City are serviced by numerous regional banking institutions. A representative sampling of banks servicing the City and their deposits as of December 31 for each year are as follows: Year Ending December 31 Earlham Savings Bank First Bank Bank Iowa 1) West Bank 2008 $169,797,000 $143,048,000 N/A $1,155,823, ,116, ,745,000 N/A 1,247,450, ,713,000 95,499,000 N/A 972,299, ,894,000 84,123,000 $913,937, ,255, ,398,000 83,942, ,585,000 1,141,575,000 1) Total Deposits not available prior to Source: FDIC website. FINANCIAL STATEMENTS The City s June 30, 2012 Comprehensive Annual Financial Report as prepared by a certified public accountant is reproduced as APPENDIX B. The City s certified public accountant has not consented to distribution of the audited financial statement and has not undertaken added review of their presentation. Further information regarding financial performance and copies of the City s prior Comprehensive Annual Financial Reports may be obtained from the City s Financial Advisor, Public Financial Management, Inc. 28

33 APPENDIX A FORM OF LEGAL OPINION

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35 100 COURT AVENUE, SUITE 600 DES MOINES, IOWA PHONE: FAX: August 21, 2013 We hereby certify that we have examined a certified transcript of the proceedings of the City Council and acts of administrative officers of the City of West Des Moines, State of Iowa (the "Issuer"), relating to the issuance of General Obligation Bonds, Series 2013A, by said City, dated the date of delivery, in the denomination of $5,000 or multiples thereof, in the aggregate amount of $4,385,000. We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion as bond counsel. As to questions of fact material to our opinion, we have relied upon representations of the Issuer contained in the Resolution authorizing issuance of the Bonds (the "Resolution") and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation. We have not been engaged to or undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering material relating to the Bonds and we express no opinion relating thereto. Based on our examination and in reliance upon the certified proceedings and other certifications described above, we are of the opinion, under existing law, as follows: 1. The Issuer is duly created and validly existing as a body corporate and politic and political subdivision of the State of Iowa with the corporate power to adopt and perform the Resolution and issue the Bonds. 2. The Bonds are valid and binding general obligations of the Issuer. 3. All taxable property in the territory of the Issuer is subject to ad valorem taxation without limitation as to rate or amount to pay the Bonds. Taxes have been levied by the Resolution for the payment of the Bonds and the Issuer is required by law to include in its annual tax levy the principal and interest coming due on the Bonds to the extent the necessary funds are not provided from other sources. WISHARD & BAILY ; GUERNSEY & BAILY ; BAILY & STIPP ; STIPP, PERRY, BANNISTER & STARZINGER ; BANNISTER, CARPENTER,

36 $4,385, 000 General Obligation Bonds, Series 2013A Page 2 4. The interest on the Bonds is excluded from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations. We express no opinion regarding other federal income tax consequences caused by the receipt or accrual of interest on the Bonds. For the purpose of rendering the opinion set forth in paragraph numbered 4 above, we have assumed compliance by the Issuer with requirements of the Internal Revenue Code of 1986, as amended, that must be met subsequent to the issuance of the Bonds in order that interest thereon be and remain excluded from gross income for federal income tax purposes. Failure to comply with such requirements could cause the interest on the Bonds to be so included in gross income retroactive to the date of issuance of the Bonds. The Issuer has covenanted to comply with such requirements. It is to be understood that the rights of the holders 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 that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Respectfully submitted, \

37 APPENDIX B JUNE 30, 2012 COMPREHENSIVE ANNUAL FINANCIAL REPORT

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40 CITY OF WEST DES MOINES, IOWA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2012 Prepared by the Finance Department 1

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42 CITY OF WEST DES MOINES 2012 COMPREHENSIVE ANNUAL FINANCIAL REPORT Table of Contents INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement in Excellence in Financial Reporting Elected and Appointed Officials Organizational Chart FINANCIAL SECTION Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements Government-wide Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Balance Sheet Governmental Funds Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Net Assets Proprietary Funds Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Funds Reconciliation of the Change in Net Assets Proprietary Funds to the Statement of Activities Statement of Cash Flows Proprietary Funds Statement of Assets and Liabilities Agency Funds Notes to Basic Financial Statements Required Supplementary Information: Schedule of Funding Progress for the Retiree Health Plan Budgetary Comparison Schedule Budget to Actual All Governmental Funds and Proprietary Funds Note to Required Supplementary Information Budgetary Reporting Required Supplementary Information Modified Approach Combining and Individual Fund Financial Statements Nonmajor Governmental Funds: Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes in Fund Balances (Deficits) Internal Service Funds: Combining Statement of Net Assets Combining Statement of Revenues, Expenses and Changes in Net Assets Combining Statement of Cash Flows Agency Funds: Combining Statement of Assets and Liabilities Combining Statement of Changes in Assets and Liabilities Summary of Key Data for Sewer Revenue Bonds (Unaudited)

43 TABLE OF CONTENTS (continued) STATISTICAL SECTION (UNAUDITED) Statistical Section Contents Net Assets by Component Changes in Net Assets Program Revenues by Function/Program Fund Balances, Governmental Funds Changes in Fund Balances, Governmental Funds General Government Tax Revenues by Source Assessed Value and Estimated Actual Value of Taxable Property Direct and Overlapping Property Tax Rates - Per $1,000 of Assessed Valuation Principal Property Taxpayers Property Tax Levies and Collections Outstanding Debt, by Type Ratios of General Obligation Bonded Debt Direct and Overlapping Governmental Activities Debt Legal Debt Margin Information Pledged-Revenue Coverage Demographic and Economic Statistics Principal Employers Full-Time Equivalent City Government Employees, by Function/Program Operating Indicators by Department Capital Asset Statistics by Department COMPLIANCE SECTION Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor's Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A Schedule of Expenditures of Federal Awards Schedule of Findings and Questioned Costs

44 INTRODUCTORY SECTION 5

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46