Investment Rating: Moody's Investors Service "A2"

Transcription

1 Refunding/New Issue Investment Rating: Moody's Investors Service "A2" In the opinion of Bond Counsel under existing law and assuming continued compliance with certain requirements of the Internal Revenue Code of 1986, as amended, interest on the Bonds i) is exempt from Iowa State income tax; and ii) is excluded from gross income for federal income tax purpose 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. The College will designate the Bonds as "qualified tax-exempt obligations" for purposes of section 265(b)(3) (B) of the Code. See "TAX MATTERS" herein. IOWA WESTERN COMMUNITY COLLEGE STATE OF IOWA (Merged Area XIII) Counties of Adair, Adams, Audubon, Cass, Crawford, Fremont, Harrison, Mills, Monona, Montgomery, Page, Pottawattamie and Shelby $7,425,000 Dormitory Revenue and Refunding Bonds, Series 2015 Dated: Date of Delivery Book-Entry Principal Due: June 1 as Described Herein The $7,400,000 Dormitory Revenue and Refunding Bonds, Series 2015 (the "Bonds") are being issued by Iowa Western Community College (Merged Area XIII), Iowa (the "College") for the purposes of: (i) currently refund the College's outstanding Dormitory Revenue Bonds, Series 2009A in the amount of $2,765,000; (ii) pay the costs to acquire, remodel, improve, furnish and equip student dormitories; (iii) fund a Debt Service Reserve Fund in the amount of approximately $742,500; and (iv) pay the issuance costs. See "THE PLAN OF FINANCING" herein. The Bonds are being issued under the authority of Iowa Code, section 260C.56 et seq., as amended. See "DESCRIPTION OF THE BONDS - Security for the Bonds" herein. Interest is payable semiannually on June 1 and December 1 of each year, commencing December 1, The Bonds will be issued using a book-entry system. The Depository Trust Company ("DTC"), New York, New York, will act as securities depository for the Bonds. The ownership of one fully registered Bond for each maturity will be registered in the name of Cede & Co., as nominee for DTC and no physical delivery of Bonds will be made to purchasers. The Bonds will mature annually on June 1 as described herein. See "BOND ISSUE SUMMARY" herein. See "CERTAIN BONDHOLDERS RISKS" herein for discussion of certain risks associated with the investment. All of the Bonds are callable beginning June 1, 2021, in whole, or from time to time, in part, in any order of maturity, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed by such series and in any order of maturity as determined by the College and within any maturity by lot. See "OPTIONAL REDEMPTION" herein. Maturity Date June 1 Principal Amount Interest Rate Yield (%) CUSIP Number * Maturity Date June 1 Principal Amount Interest Rate Yield (%) CUSIP Number* 2025 $520, % 2.300% 46262HFR , HFW , HFS ,920, HFX , HFT ,165, HFY9 $1,145, % Term bond due June 1, 2029 Priced to yield 3.000% Cusip #'s* 46262H FV5 In the opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, the Bonds will constitute valid and legally binding obligations of the College and create a valid first lien on the Net Revenues of the Iowa Western Community College Housing System for students (the "Dormitory System"), including other Incidental Facilities pledged by the Resolution adopted by the Board of Directors. The Bonds are also secured by a Mortgage on the improvements acquired and improved with the proceeds of the Bonds and the Refunded Bonds which are part of the Dormitory System, and the moneys held pursuant to the funds and accounts held by the Issuer, including a Debt Service Reserve Fund. THE BONDS CONSTITUTE A VALID AND BINDING SPECIAL OBLIGATION OF THE COLLEGE PAYABLE SOLELY FROM THE SOURCES AND FUNDS PROVIDED IN THE RESOLUTION. The Bonds are offered, subject to prior sale, withdrawal or modification, when, as and if issued, subject to the opinion of Ahlers & Cooney, P.C., Des Moines, Iowa, as Bond Counsel to the College to be furnished upon delivery of the Bonds. Certain matters will be passed upon for the College by Ahlers & Cooney, P.C., Des Moines, Iowa. The Bonds, in definitive form, are expected to be available for delivery through the facilities of DTC in New York, New York on or about February 2, This Preliminary Official Statement will be further supplemented by offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, anticipated delivery date, and the identity of the underwriters, together with any other information required by law, and shall constitute a "Final Official Statement" of the College with respect to the Bonds, as defined in Rule 15c2-12. Baird The Date of this Official Statement is January 19, 2015 * CUSIP numbers shown above have been assigned by a separate organization not affiliated with the Issuer. The Issuer has not selected nor is responsible for selecting the CUSIP numbers assigned to the Bonds nor do they make any representations as to the correctness of such CUSIP numbers on the Bonds or as indicated above.

2 COMPLIANCE WITH S.E.C. RULE 15c2-12 Municipal obligations (issued in an aggregate amount over $1,000,000) are subject to General Rules and Regulations, Securities Exchange Act of 1934, Rule 15c2-12 Municipal Securities Disclosure. Preliminary Official Statement: This Preliminary Official Statement was prepared for the College for dissemination to prospective bidders. Its primary purpose is to disclose information regarding the Notes to prospective bidders in the interest of receiving competitive bids in accordance with the TERMS OF OFFERING contained herein. Unless an addendum is received prior to the sale, this document shall be deemed the "Near Final Official Statement". Review Period: This Preliminary Official Statement has been distributed to College staff as well as to prospective bidders for an objective review of its disclosure. Comments or omissions or inaccuracies must be submitted to Public Financial Management, Inc. at least two business days prior to the sale. Requests for additional information or corrections in the Preliminary Official Statement received on or before this date will not be considered a qualification of a bid received. If there are any changes, corrections or additions to the Preliminary Official Statement, prospective bidders will be informed by an addendum at least one business day prior to the sale. Final Official Statement: Upon award of sale of the Bonds, the legislative body will authorize the preparation of a Final Official Statement that includes the offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, anticipated delivery date and other information required by law and the identity of the syndicate manager (the "Syndicate Manager") and syndicate members. Copies of the Final Official Statement will be delivered to the Syndicate Manager within seven business days following the bid acceptance. No dealer, broker, salesman or other person has been authorized by the College to give any information or to make any representations with respect to the Bonds other than as contained in the Preliminary Official Statement or the Final Official Statement and, if given or made, such other information or representations must not be relied upon as having been authorized by the College. Certain information contained in the Preliminary Official Statement and the Final Official Statement may have been obtained from sources other than records of the College and, while believed to be reliable, is not guaranteed as to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE PRELIMINARY OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE PRELIMINARY OFFICIAL STATEMENT OR THE FINAL OFFICIAL STATEMENT NOR ANY SALE MADE UNDER EITHER SUCH DOCUMENT SHALL CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COLLEGE SINCE THE RESPECTIVE DATES THEREOF. References herein to laws, rules, regulations, ordinances, resolutions, agreements, reports and other documents do not purport to be comprehensive or definitive. All references to such documents are qualified in their entirety by reference to the particular document, the full text of which may contain qualifications of and exceptions to statements made herein. Where full texts have not been included as appendices to the Preliminary Official Statement or the Final Official Statement they will be furnished on request. This Preliminary Official Statement does not constitute an offer to sell, or solicitation of an offer to buy, any securities to any person in any jurisdiction where such offer or solicitation of such offer would be unlawful. Compensation of Piper Jaffray & Co. (the "Financial Advisor") and Ahlers & Cooney, P.C., payable entirely by the College, is contingent upon the sale of the issue.

3 PRELIMINARY OFFICIAL STATEMENT IOWA WESTERN COMMUNITY COLLEGE Board of Directors Randy Pash Connie Hornbeck Doug Goodman Fred Lisle Kirk Madsen Scott Robinson Robert Ross Brent Siegrist Larry Winum President Vice President Board Member Board Member Board Member Board Member Board Member Board Member Board Member Officials Dr. Dan Kinny Thomas Johnson Dr. Marjorie Welch Tori Christie Donald Kohler Molly Noon Erin Stopak President Vice President of Finance and Operations/Board Treasurer Vice President of Academic Affairs Vice President of Student Services Vice President of Marketing/Public Relations Vice President of Institutional Advancement Administrative Assistant to the President/ Board Secretary Consultants Bond Counsel/Disclosure Counsel: Financial Advisor: Treasurer-Paying Agent: Ahlers & Cooney, PC Des Moines, Iowa Piper Jaffray & Co. Des Moines, Iowa Office of the Treasurer Iowa Western Community College INTRODUCTORY STATEMENT This Official Statement, including the cover page and all appendices, is provided to set forth certain information concerning the Dormitory Revenue and Refunding Bonds, Series 2015 (the "Bonds") to be issued by Iowa Western Community College (Merged Area XIII) (the "College"), in the aggregate principal amount of $7,425,000. The Bonds are issued pursuant to a Resolution (the "Resolution") to be adopted January 19, 2015 by the Board of Directors of the College (the "Board"). All capitalized terms used in this Official Statement and not otherwise defined herein have the meanings set forth in the Resolution. Authority The Bonds are issued pursuant to the provisions of Chapter 260C of the Code of Iowa, as amended (the "Act"). The College is authorized to issue and sell its negotiable bonds to fund the construction or acquisition of residence halls 1

4 and dormitories including dining or other incidental facilities and additions to those buildings including the refunding of bonds originally issued for the aforementioned purposes. The Iowa Western Community College Dormitory System (the "Dormitory System") consists of the housing facilities described more fully herein under "THE IOWA WESTERN COMMUNITY COLLEGE DORMITORY SYSTEM" located on the campus of the College in Council Bluffs, Iowa. The College is obligated under the Resolution to establish rental and income levels sufficient to make payments of principal of and interest on the Bonds, as the same shall become due, and meet the ratio requirements prior to the issuance of hereinafter defined Parity Bonds. The Bonds will be payable solely from and secured by a pledge of revenues and other amounts from the Dormitory System as required by the Act. Pursuant to a Mortgage held by the Treasurer of the College in trust solely for the benefit of the Bondholders dated and executed along with the sale and issuance of the Bonds (the "Mortgage"), the payment of the principal of, and interest on the Bonds, and any future Parity Bonds issued under the Resolution, is secured by a mortgage on the improvements acquired and improved with the proceeds of the Bonds and the Refunded Bonds which are part of the Dormitory System. A debt service reserve fund for the Bonds will be funded in the amount of $545,585 from Bond Proceeds and $196,915 of Transferred Proceeds and NOT from Bond proceeds. CERTAIN BONDHOLDERS' RISKS Purchase of the Bonds entails risks to the purchaser which should be considered prior to any purchase of the Bonds. This section discusses some of these risks, but it is not intended to be a comprehensive listing of all risks associated with purchasing and owning the Bonds. No representation or assurance is given or can be made that Net Revenues from the Dormitory System will be realized by the College in amounts sufficient to pay the debt service on the Bonds when due and other payments necessary to meet the obligations of the College. Such Net Revenues are affected by and subject to conditions, which may change in the future to an extent and with facts that cannot be determined at this time. The risk factors discussed below should be considered in evaluating the College's ability to make payments on the Bonds. This discussion of risk factors is not, and is not intended to be, exhaustive. Experience The College has only its own experience in the ownership and operation of student housing facilities on its Council Bluffs campus. Because the College has limited experience in operating such facilities, there is no assurance that the College will have the management and operating personnel necessary to market and operate such facilities. No Recourse Notwithstanding any other provision of the Resolution, or the Mortgage, in the event of a default under any of such documents, the only recourse shall be to foreclose on the student housing facilities mortgaged under the Mortgage. Under no circumstances shall anyone be entitled to obtain a deficiency judgment against the College. Occupant Availability The ability of the College to earn sufficient income to pay debt service on the Bonds will depend upon the ability of the College to maintain occupancy at a level sufficient to allow the College to achieve positive operating results. Thus, the ability of the College to pay debt service on the Bonds is dependent on the continued availability of residents. There is no assurance that the College will be able to attract sufficient residents to generate the necessary income. The College believes that there is currently sufficient demand for student housing facilities on its Council Bluffs campus based on the recent residency level. However, there can be no assurance that this will continue to exist, or that occupancy will be maintained at the necessary levels during the term of the Bonds. The failure of the Dormitory System to generate a sufficient level of occupancy could result in the College having insufficient income to pay debt service on the Bonds. Housing Industry The housing industry may be impacted by a wide variety of factors, which could adversely affect the operations of the Dormitory System and its ability to produce sufficient revenues to pay its operating expenses and pay debt service on the Bonds. Many of these factors are out of the control of the College including federal, state and local government regulations, costs of maintenance, utility costs, litigation costs, and competition. In addition, the demand for housing will be directly related to the enrollment at the College. Enrollment at the College will be impacted by the cost of tuition and 2

5 other costs of attendance, the ability of the College to offer programs which appeal to students, the economy in the area served by the College and other factors beyond the control of the College. Other Risk Factors The effectiveness of the Mortgage may be limited by a number of factors including: 1. Statutory liens; 2. Rights rising in favor of the United States of America or any agency thereof; 3. Constructive trusts, equitable or other rights impressed or conferred by a state or federal court in the exercise of its equitable jurisdiction; 4. Federal bankruptcy laws which may affect the enforceability of the Resolution and the mortgage or and security interest in the property constituting the Dormitory System; and 5. The Resolution allows for the issuance of Parity Bonds, which may be equally and ratable secured by the Mortgage with the Bonds. See APPENDIX C under the heading of "Parity Bonds." Any such additional parity indebtedness would be entitled to share ratably with the holders of the Bonds in any money realized from the exercise of remedies in the event of a default by the College and in the proceeds of certain insurance and condemnation awards. 6. There is no bond trustee or similar person to monitor or enforce the terms of the resolution for issuance of the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the College and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. The following factors, among others, may also affect the operations or financial performance of the College and the Dormitory System: 1. Competition from other types of higher education, including public and private four-year colleges, other community colleges, and for-profit colleges and training schools; 2. Competition from both existing and new apartment complexes in the Council Bluffs/Omaha metropolitan area; 3. Increased unemployment or other adverse economic conditions and decreases in population within the areas served by the College, any of which could decrease the enrollment at the College or the demand for housing at the College; 4. Decreased funding at either the state or federal level for education at the community college level; and 5. The ability of, and the cost to, the College to continue to insure or otherwise protect itself from liability claims and comply with governmental regulations. New Money Portion of the Project Completion As of the date of this Official Statement, the College has entered into a Purchase Agreement to acquire an existing facility in the amount of $3,188, The purchase of the facility was completed on September 23, The College will use approximately $1,000,000 of Bond Proceeds to make improvements to the facility after the acquisition is complete. The College has not finalized any contracts for the improvement of the facility. The improvements are anticipated to be complete by August 30, A delay in completion of the imrprovement/remodeling may arise from any number of other causes, including but not limited to, adverse weather conditions, unavailability of subcontractors, 3

6 negligence on the part of subcontractors, labor disputes, or unanticipated costs of construction, equipping or renovation. Any of these events or occurrences, separately or in combination, could have a material adverse effect on the College's ability to complete the improvement/renovation, or to complete it as planned and on the schedule as described herein. The College has not entered into a contract guaranteeing the maximum construction cost of the Project. The College believes that the New Money Portion of the Bond Proceeds of the Bonds will be sufficient to complete the Project Refunding Portion of the Project The Issuer will use the Refunding Portion of the Bonds to currently refund the $2,765,000 of the $3,000,000 Dormitory Revenue Bonds, Series 2009A, dated February 1, 2009 on February 19, Damage or Destruction to College's Facilities There can be no assurance that the College will not suffer uninsured losses in the event of damage to or destruction of the College's facilities, including the Project, due to fire or other calamity or in the event of other unforeseen circumstances. Governmental Regulation The housing industry is significantly regulated by the federal and local government. Regulations and conditions affecting the acquisition, development and ownership of residential real estate, including local zoning and land use issues, environmental regulations, the Americans with Disabilities Act, the Fair Housing Amendments Act of 1988 and general conditions in the multifamily residential real estate market, could increase the operating expenses of the Project or could otherwise have a material adverse effect on the Dormitory System, or the financial results of System operations. Required Occupancy Levels and Rents In order for the College to generate sufficient revenues to enable it to make the debt service payments in the amounts and at the times required, the Project must meet certain assumed occupancy levels and achieve certain assumed rents during each Fiscal Year. There can be no assurance, however, that the New Money Portion of the Project or the portion of the System financed with the Refunded Bond Proceeds will be able to meet and maintain such required occupancy and rent levels during any Fiscal Year. Lack of Market for the Bonds The Bonds will not be listed on a securities exchange or inter-dealer quotation system. Although the Underwriter presently intends to make a market for the Bonds, the Underwriter is not obligated to purchase any of the Bonds in the future, and such market making may be discontinued at any time. There can be no assurance that there will be a secondary market for the Bonds, and the absence of such a market for the Bonds could result in investors not being able to resell their Bonds at an acceptable price should they need or wish to do so. Limitation or Delay of Remedies There is no bond trustee or similar person to monitor or enforce the provisions of the resolution 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 College 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 remedies available to the owners of the Bonds upon an event of default under the Resolution and the Mortgage are in many respects dependent upon judicial actions which are often subject to discretion and delay. Under existing constitutional and statutory law and judicial decisions, including specifically the Bankruptcy Code, the remedies provided in the Resolution and the Mortgage may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Bonds and the delivery of the Resolution and the Mortgage will be 4

7 qualified as to the enforceability of the various legal instruments by limitations imposed by general principles of equity and by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. Actual Results May Differ From Projected Net Revenues The Projected Net Revenues and Debt Service Coverage and its forecast of future revenues and expenses is based upon assumptions concerning future events, circumstances, and transactions see "PLAN OF FINANCING - Projected Net Revenues and Debt Service Coverage" herein. In addition, the Projected Net Revenues contained herein only covers the period ending June 30, The achievement of any financial forecast is dependent upon future events, the occurrence of which cannot be assured. Realization of the results forecasted will depend on the implementation by the College of policies and procedures consistent with such assumptions. Future results will also be affected by events and circumstances beyond the control of the College. For the reasons described above, it is likely that the actual results of the Project will be different from the results forecast in the Projected Net Revenues and those differences may be material and adverse. The Projected Net Revenues was developed by the College and no independent third party has provided information with respect to the Projected Net Revenues. The ability of the College to pay debt service on the Bonds depends upon its ability to market the Project. The economic feasibility of the Project depends upon the ability of the College to attract sufficient students and the College to attract sufficient residents and to maintain substantial occupancy at projected rent levels of such Project throughout the term of the Bonds. There can be no assurance that the levels of occupancy assumed in the Projected Net Revenues will be obtained or maintained. Bond Rating There can be no assurance that the rating assigned to the Bonds at the time of issuance will not be lowered or withdrawn at any time, the effect of which could adversely affect the market price for, and marketability of, the Bonds. See "INVESTMENT RATING" herein. Additional Indebtedness Subsequent to the issuance of the Bonds, the Resolution contains provisions permitting the College to issue Additional Indebtedness subject to certain restrictions as set forth in the Resolution. See "SUMMARY OF THE RESOLUTION AND MORTGAGE FOR THE BONDS." Future borrowing by the College could weaken the financial condition of the College and diminish the College's ability to make timely debt service payments on the Bonds. THE IOWA WESTERN HOUSING SYSTEM IWCC developed a strategic long-term plan beginning in 2002 through the office of its Vice President of Finance and Operations by conducting a survey of existing and potential students to assess the needs of students regarding student housing and used the results to develop the long-term housing plan for the College. Based on a survey of its students the College developed a plan for the Reiver Suites portion of its Housing System. Reiver Suites I Reiver Suites I consists of six (6) residential housing units providing 432 beds for IWCC student residents. Each building unit is a three-story facility with six (6) suites per floor with each suite having four (4) bedrooms and a common living area. In addition to the six (6) housing units, there will be a 6,000 square foot community building providing community services for residents including housing administration, laundry, mail room services and recreational opportunities. Phase I Construction commenced in August 2004 and included the 6,000 square foot commons building and housing Units 3 and 4 for a total of 144 beds. In addition to the commons building and Units 3 and 4, Phase I construction included site preparation, extension of utility services, access road and requisite parking for 144 residential spots. Construction was completed by July 2005 and occupancy by students began with the Fall semester

8 Phase II Phase II of the Reiver Suites I includes the construction of Unit 2 for an additional 72 beds. In addition to the construction of Unit 2, additional parking was added to accommodate the increased student resident population. Construction of this Phase II was completed in July of Phase III Construction commenced in August of 2007 and finished by June 2008 for student occupancy in the Fall of The project included the construction of two, three (3) story facilities (Units number 1 and 5) that added an additional one hundred forty-four (144) beds. Phase IV Construction commenced in August of 2008 and was completed by the end of June 2009 for student occupancy by the Fall 2009 semester. The project included the construction of one, three (3) story facility (Unit number 6) that added an additional seventy-two (72) beds. The design, construction, functionality and appearance was identical to the Units 1, 2, 3, 4, 5 and completed from 2004 to The facility provides "suite style" housing accommodations with six (6) suites per floor in the three (3) story building. Each suite contains four (4) individual bedrooms, two (2) bathrooms and a common living area. Reiver Suites II Reiver Suites II consists of six (6) residential housing units providing 432 beds for IWCC student residents. Each building unit is a three-story facility with six (6) suites per floor with each suite having four (4) bedrooms and a common living area. In addition to the six (6) housing units, there is a 6,000 square foot community building providing community services for residents including housing administration, laundry, mail room services and recreational opportunities. Phase I Construction commenced in August 2009 and was completed in early August of 2010 for housing Units 9 and 10 for a two wing total of 144 beds and a commons building for Suites II. Construction was completed August 2010 and occupancy by students will begin with the Fall semester Phase II Construction commenced in the Fall of 2010 on Suites II Phase II and was completed in Summer 2011 for housing units 7 and 8 for a two wing total of 144 new beds. Student residents first occupied the facility for the Fall of 2011 with total capacity of Suites II increased to 288 residents. Phase III - Construction commenced in the Spring of 2012 and was completed in the Summer of 2013 for housing units 11 and 12 for a two wing total of 144 new beds. Student residents first occupied the facility for the Fall of 2013 with total capacity of Suites II increased to its final total of 432 residents. Apartment Complex The College issued its Series 2005B Bonds for the purchase of the Apartments from WID (described below) in 2005 according to the terms of the initial documents entered into for the construction and financing of the Apartments in The Apartments then became part of the College's Housing System. The apartments consist of six (6) two-story residential buildings and a clubhouse constructed on 5.5 acres of land located on the Council Bluffs campus of IWCC. Each residential building has eight (8) two (2) bedroom apartments designed to accommodate four (4) student residents per apartment for a total bed count of 192. The clubhouse, a separate building, provides recreational opportunities, laundry services and U.S. mail delivery for apartment residents. Originally constructed in the mid-70s, the College, following acquisition, began renovation on the Apartments. Exterior renovations on all six (6) resident units was completed and included new insulation/siding, replacement vinyl clad windows, new steel doors and frames and 25-year composite shingle roofs. Interior renovation of all units has been completed on all units. Residence Hall or Dorms - The Residence Hall is a five (5) story brick dormitory style building constructed on 12.4 acres on the Council Bluffs campus of Iowa Western. There are forty-two (42) rooms on each of the top four (4) floors with a total occupancy (beds) of 336 based on two (2) students per room. Each room comes equipped with a bed, desk and armoire for each resident. In addition, each student receives local telephone service, cable TV hook up and high speed internet access. These services are included in the semester rental rate. Any student residing in the residence hall must purchase a meal plan from IWCC's Food Service Department, as there are no cooking facilities in the residence hall. The first floor of the Hall provides resident services including mailboxes, laundry, computer lab and recreation. The Board of Trustees of the College adopted a resolution at its May 19, 2014 board meeting offering to purchase the Reiver Tower Dormitory from Western Iowa Dorms, Inc. (WID) for $3,188, At its September 4, 2014 board 6

9 meeting, the Directors of WID adopted a resolution accepting the purchase offer from the College subject to release of the mortgage and trust indenture held by the U.S. Department of Education (U.S. DOE). The U.S. DOE approved the release and the purchase transaction was completed on September 23, The College utilized existing monetary resources to facilitate the purchase with the understanding that long-term financing would be issued in the first quarter With the financing contemplated herein (Dormitory Revenue Bonds $7,425,000 Series 2015), the College will own and operate all student housing facilities on its Council Bluffs, Iowa campus. Only the College's Dormitory Revenue Bonds have, or will have, a lien of the facilities themselves or a lien on the Net Revenues of the College's housing system. General Information DESCRIPTION OF THE BONDS The Bonds will be issued in the amount of $7,425,000. The Bonds are dated the date of delivery (expected to be on or about February 2, 2015) and will be issued as fully registered Bonds in the denomination of $5,000 or any integral multiple thereof and, when issued, will be registered in the name of Cede & Co., as Bond holder and nominee of the Depository Trust Company, New York, New York ("DTC"). DTC will act as securities depository for the Bonds. Purchases of the Bonds will be made in book-entry form. Purchasers of the Bonds will not receive Bonds representing their interest in the Bonds purchased. So long as DTC or its nominee, Cede & Co., is the Bond holder, the principal and interest on the Bonds will be paid to DTC, which will in turn remit such principal and interest to its participants for subsequent dispersal to the beneficial owners of the Bonds as described herein. Disbursement of such payments to the Beneficial Owners is the responsibility of the DTC Participants as more fully described in APPENDIX C. The Bonds will bear interest from their dated date at such rates and mature on the dates and in the amounts as described in the BOND ISSUE SUMMARY, with interest being payable December 1, 2015 and semiannually thereafter on the first day of June and December in each year until maturity or earlier redemption. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Payments of principal and interest shall be made to the registered holders thereof or to their designated agents as the same appear on the books of the Registrar. Security In the opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, the Bonds will constitute valid and legally binding obligations of the College and create a valid first lien on the Net Revenues of the Iowa Western Community College Housing System for students (the "Dormitory System"), including other Incidental Facilities pledged by the Resolution adopted by the Board of Directors. The Bonds are also secured by a Mortgage on the improvements constructed with the proceeds of the Bonds and Refunded Bonds which are part of the Dormitory System, and the moneys held pursuant to the funds and accounts. No opinion regarding the priority of the Mortgage will be given. A portion of the Bond proceeds in the approximate amount of $545,585 along with $196,915 of transferred proceeds, will fund a debt service reserve fund for the Bonds. See "DORMITORY SYSTEM DEBT" and "SUMMARY OF THE INDENTURE, RESOLUTION AND MORTGAGE FOR THE BONDS" herein. The Bonds will be special, limited obligations of the College. The Bonds are not general obligations of the College and do not count as part of the College's debt restricted by constitutional or statutory limits. The Bonds are not payable from any tax lien of the College. The College shall maintain the rental rates and dining and other related facility rates and charges at a level necessary so the Net Revenues of the Dormitory System (see "SUMMARY OF THE RESOLUTION AND MORTGAGE FOR THE BONDS") equal at least 125% coverage of all debt service due on the Bonds and other dormitory revenue bonds with a lien on the Net Revenues of the Dormitory System within the designated budget period. The College shall review the sufficiency of the rates before the beginning of each fiscal year. Fund Transfer To the extent that debt service coverage from the Net Revenues of the Dormitory System fall below the levels required, the College will covenant to transfer other available funds as an annual appropriation to the maximum amount of funds permitted by Iowa statute as necessary for the administrative cost of operation and other non-debt service expenses 7

10 including maintenance, replacement and improvement expenses, salaries, services, materials and supplies for the operation of the Dormitory System. Optional Redemption All of the Bonds are callable beginning June 1, 2021, in whole, or from time to time in part, in any order of maturity at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed by such series and in any order of maturity as determined by the College and within any maturity by lot. The Registrar/Paying Agent will give notice of redemption, identifying the Bonds (or portions thereof) to be redeemed, by mailing a copy of the redemption notice by ordinary mail not less than thirty (30) days prior to the date fixed for redemption to the registered owner of each Bond (or portion thereof) to be redeemed at the address shown on the registration books maintained by the Registrar. Failure to give such notice by mail to any registered owner of the Bonds (or portion thereof) or any defect therein shall not affect the validity of any proceedings for the redemption of other Bonds (or portions thereof). All Bonds (or portions thereof) so called for redemption will cease to bear interest after the specified redemption date, provided funds for their redemption are on deposit at the place of payment at that time. Mandatory Redemption Bonds coming due on June 1, 2029 are term bonds (the "Term Bonds") and are subject to mandatory redemption prior to maturity on June 1 of the years and in the amounts as follows: $1,145, % Term Bonds Due June 1, 2029; Yield 3.000% Redemption Date Amount 06/01/ $565,000 06/01/2029 $580,000 (stated maturity) The College covenants that it will redeem the Term Bonds pursuant to the mandatory redemption requirement for such Term Bonds. Proper provision for mandatory redemption having been made, the College covenants that the Term Bonds so selected for redemption shall be payable as at maturity. Use of Bond Proceeds The Bond proceeds will be used to: (i) currently refund the College's outstanding Dormitory Revenue Bonds, Series 2009A in the amount of $2,765,000; (ii) pay the costs to acquire, remodel and improve student dormitories; (iii) fund a Debt Service Reserve Fund; and (iv) pay the issuance costs of the Bonds, as more fully described in "PLAN OF FINANCING" herein. The use of the proceeds of the Bonds and other available funds is as follows: Sources: Uses: Bond Proceeds $7,425, Net Premium 11, Prior Issue Debt Service Reserve Fund 196, Surplus Cash 285, Total $7,918, Current Refunding Deposit $2,794, Construction Fund 4,200, Debt Service Reserve Fund 742, Cost of Issuance 55, Underwriters Discount 125, Total $7,918,

11 SUMMARY OF THE RESOLUTION AND MORTGAGE FOR THE BONDS The following are summaries of certain of the applicable provisions of the Resolution and Mortgage. Copies of the Resolution and Mortgage are available on request to the College. Reference is made to such documents for a complete description thereof. The summary herein is qualified by such reference. See "APPENDIX D" for a draft form of the Resolution. Definitions "Additional Bonds" shall mean any dormitory revenue bonds issued on a parity with the Bonds in accordance with the provisions of the Resolution. "Authorized Denominations" shall mean $5,000 or any integral multiple thereof. "Bond Proceeds" shall mean the amount actually received from the sale of the Bonds and paid to the College on the Closing Date. "Bonds" shall mean the $7,425,000 Dormitory Revenue and Refunding Bonds, Series 2015, authorized to be issued by the Resolution. "Closing Date" shall mean the date on which the College shall deliver the Bonds to the Original Purchaser in exchange for the agreed upon purchase price. "Continuing Disclosure Certificate" shall mean those certain Continuing Disclosure Certificates executed by the College and dated the date of issuance and delivery of the Bonds, as originally executed and as may be amended from time to time in accordance with the terms thereof. "Current Expenses" shall mean and include the reasonable and necessary cost of operating, maintaining, repairing and insuring the System, including purchases at wholesale, if any, salaries, wages, and costs of materials and supplies but excluding depreciation and principal of and interest on the Bonds, and any Parity Bonds or payments to the various funds established herein; capital costs, depreciation and interest or principal payments are not Dormitory System expenses. "DTC" shall mean The Depository Trust Company, New York, New York, a limited purpose trust company, or any successor book-entry securities depository appointed for the Bonds. "Fiscal Year" shall mean the twelve-month period beginning on July l of each year and ending on the last day of June of the following year, or any other consecutive twelve-month period adopted by the governing body or by law as the official accounting period of the Dormitory System. Requirements of a Fiscal Year as expressed in the Resolution shall exclude any payment of principal or interest falling due on the first day of the Fiscal Year and include any payment of principal or interest falling due on the first day of the succeeding Fiscal Year. "General College Revenues" shall mean legally available funds of the College from whatever source derived including but not limited to the general operating fund of the College and funds described in Section 260C.34, Code of Iowa. "Gross Earnings" shall mean all fees, income, and revenues of the Dormitory System and Incidental Facilities. "Incidental Facilities" shall mean self-supporting auxiliary enterprises of the College for which fees or charges are paid including but not limited to dining, food service and college stores. "Independent Auditor" shall mean an independent firm of Certified Public Accountants, an independent financial advisor or the Auditor of State of Iowa. "Issuer", "Community College", "College" or "Borrower" shall mean Iowa Western Community College, Council Bluffs, Iowa. 9

12 "Mortgage" shall mean the Mortgage of even date with the Bonds from the College securing the Bonds. "Net Revenues" shall mean Gross Earnings of the Dormitory System including dining and other Incidental Facilities after deduction of Current Expenses. "New Money Portion of the Bonds" shall mean $3,914, of the Bonds. "Original Purchaser" or "Underwriter" shall mean Robert W. Baird & Co., Inc. of Milwaukee, Wisconsin. "Outstanding Bonds" shall mean, collectively, the $1,205,000 Dormitory Revenue Bonds, Series 2005B (the "Series 2005B Bonds") dated June 1, 2005 issued in accordance with the Prior Bond Resolution, of which $160,000 of the bonds are still outstanding and unpaid and remain a lien on the Net Revenues of the System; $9,865,000 Dormitory Revenue Bonds (Build America Bonds-Direct Pay), Series 2009B (the "Series 2009B Bonds") dated October 1, 2009, issued in accordance with the Prior Bond Resolution, of which $9,290,000 of the bonds are still outstanding and unpaid and remain a lien on the Net Revenues of the System; $15,450,000 Dormitory Revenue Bonds, Series 2010A, (the "Series 2010A Bonds") dated October 1, 2010, issued in accordance with the Prior Bond Resolution, of which $13,305,000 of the bonds are still outstanding and unpaid and remain a lien on the Net Revenues of the System; $6,700,000 Dormitory Revenue Bonds, Series 2012A (the "Series 2012A Bonds") dated March 15, 2012, issued in accordance with the Prior Bond Resolution, of which $6,215,000 of the bonds are still outstanding and unpaid and remain a lien on the Net Revenues of the System; and $9,900,000 Dormitory Revenue Refunding Bonds, Series 2012B (the "Series 2012B Bonds") dated March 15, 2012, issued in accordance with the Prior Bond Resolution, of which $8,960,000 of the bonds are still outstanding and unpaid and remain a lien on the Net Revenues of the System. "Parity Bonds" shall mean Dormitory Revenue Bonds which are payable solely from the Net Revenues of the Dormitory System on an equal basis with the Bonds; and shall include the Dormitory Revenue Bonds, Series 2013B, capital leases for the acquisition of buildings, facilities and equipment for the Dormitory System. Parity Bonds shall also include Additional Bonds as authorized to be issued under the terms of the Resolution. "Paying Agent" shall mean the Office of the Treasurer, Iowa Western Community College, Council Bluffs, Iowa or such successor as may be approved by College as provided herein and who shall carry out the duties prescribed herein as College's agent to provide for the payment of principal of and interest on the Bonds as the same shall become due. "Permitted Investments" shall mean any investments permitted in Iowa Code chapter 12B or section 12C.9. All interim investments must mature before the date on which the moneys are required for payment of principal and interest on the Bonds or project costs. "Prior Bond Resolutions" shall mean, collectively, certain resolutions adopted by the Issuer on May 16, 2005 authorizing the issuance of the Series 2005B Bonds; on September 21, 2009 authorizing the issuance of the Series 2009B Bonds; on September 20, 2010 authorizing the issuance of the Series 2010A Bonds; on February 22, 2012 authorizing the issuance of the Series 2012A Bonds; and on February 22, 2012 authorizing the issuance of the Series 2012B Bonds. "Project" shall mean, for the New Money Portion of the Bonds, constructing, acquiring, improving, furnishing, and equipping student dormitories, including the Incidental Facilities and paying costs of issuance; for the Refunding Portion of the Bonds, currently refunding the Refunded Bonds. "Project Fund" shall mean the fund established under the Resolution for the deposit of Bond Proceeds to be used for defraying the cost of the Project. "Refunded Bonds" shall mean $2,765,000 of the $3,000,000 Dormitory Revenue Bonds, Series 2009A dated February 1, 2009, as listed in Schedule A attached to the Resolution. "Refunding Portion of the Bonds" shall mean $2,794, of the Bonds. "Registrar" shall mean the Office of the Treasurer, Iowa Western Community College, Council Bluffs, Iowa or such successor as may be approved by College as provided in the Resolution and who shall carry out the duties prescribed 10

13 herein with respect to maintaining a register of the owners of the Bonds. Unless otherwise specified, the Registrar shall also act as Transfer Agent for the Bonds. "Reserve Fund" shall mean the Debt Service Reserve Fund established under the Resolution. "Reserve Fund Requirement" shall mean an amount equal to the lesser of (a) the maximum amount of the principal and interest coming due on the Bonds and Parity Bonds; (b) 10% of the stated principal amount of the Bonds and Parity Bonds (for issues with original issue discount the issue price as defined in the Tax Exemption Certificate shall be substituted for the stated principal amount) or (c) 125% of the average principal and interest coming due on the Bonds and Parity Bonds. For purposes of this definition: (1) "issue price" shall be substituted for "stated principal amount" for issues with original issue discount or original issue premium of more than a de minimus amount and (2) stated principal amount shall not include any portion of an issue refunded or advance refunded by a subsequent issue. "Resolution" shall mean the resolution or resolutions adopted by the Board of Directors of the College authorizing the issuance of the Bonds. "Revenue Fund" shall mean the fund established under the Resolution. "Secretary" shall mean the Secretary of the Board of Directors of the College or such other officer of the successor governing body as shall be charged with substantially the same duties and responsibilities. "Sinking Fund" shall mean the sinking fund established under the Resolution. "System" or "Dormitory System" shall mean the entire residence hall and dormitory system of the College and shall include dining and other Incidental Facilities therefor and all properties of every nature hereinafter owned by the Issuer comprising part of or used as a part of the System, including the new residence facility to be acquired, remodeled and improved with the New Money Portion of the Bonds and the residence facility constructed with the proceeds of the Refunding Portion of the Bonds and including all improvements and extensions made by Issuer while any of the Bonds or Parity Bonds remain outstanding; all real and personal property; and all appurtenances, contracts, leases, franchises and other intangibles. "Tax Exemption Certificate" shall mean the Tax Exemption Certificate executed by the Treasurer and delivered at the time of issuance and delivery of the Bonds. "Treasurer" shall mean the Secretary/Treasurer of the College or such other officer as shall succeed to the same duties and responsibilities with respect to the recording and payment of the Bonds issued under the Resolution. Authority The Bonds authorized by the Resolution shall be issued pursuant to Section 260C.56 et seq of the Code of Iowa, and in compliance with all applicable provisions of the Constitution and laws of the State of Iowa. Source of Payment The Bonds authorized by the Resolution and Parity Bonds and the interest thereon shall be payable solely and only out of the Net Revenues of the Dormitory System and shall be a first lien on the future Net Revenues of the Dormitory System. The Bonds shall not be general obligations of the College nor shall they be payable in any manner by taxation and the College shall be in no manner liable by reason of the failure of the Net Revenues to be sufficient for the payment of the Bonds. The Bonds do not constitute a charge against the State of Iowa within the meaning or application of any constitutional or statutory limitation or provision. Principal and interest coming due at any time when monies in the Revenue Fund hereinafter created are insufficient may be paid when due from other legally available funds of the College available for that purpose including, without limitation, General College Revenues and other funds described in Section 260C.34 of the Code of Iowa. 11

14 Mortgage Concurrently with the sale and delivery of the Bonds, the College shall execute and deliver the Mortgage on: 1) the real estate and improvements constructed thereon with the proceeds of the Refunded Bonds; and 2) to the real estate and improvements constructed thereon with the proceeds of the Bonds, to the Treasurer for the benefit of the owners of the Bonds as additional security for the payment of the Bonds and in order to induce the purchase of the Bonds by the Original Purchaser. The President and Secretary of the Board of Directors are hereby authorized to execute the Mortgage and the Release of Mortgage on the real estate and improvements constructed thereon, such Mortgage dated January 19, 2009 and filed at Book 2009, Page on behalf of the Community College. Application of Bond Proceeds Pursuant to the Resolution, Bond Proceeds shall be deposited and applied as follows: (a) An amount equal to accrued interest, if any, shall be deposited in the Sinking Fund for application to the first payment of interest on the Bonds. (b) $742,500 ($545,585 from Bond Proceeds and $196,915 of Transferred Proceeds and NOT from Bond Proceeds) shall be deposited in the Reserve Fund. (c) $2,794,562 from Bond Proceeds is placed in escrow with the Issuer. The Issuer shall 1) hold proceeds in a special and irrevocable trust fund, 2) invest proceeds only in cash or direct obligations of the United States, and 3) apply proceeds and earnings to pay when due, all of the principal and interest due on the Refunded Bonds on February 19, 2015, and only in accordance with the terms and conditions of the Resolution authorizing the Refunded Bonds. (d) There is hereby created a Project Fund, to be held by the Issuer, into which the balance of the Bond Proceeds shall be deposited and expended therefrom to pay the costs of the New Money Portion of the Project and costs of issuance. Any amounts on hand in the Project Fund shall be available for the payment of the principal of or interest on the Bonds at any time that Net Revenues shall be insufficient to the purpose, in which event such funds shall be repaid to the Project Fund at the earliest opportunity. Any balance on hand in the Project Fund and not immediately required for its purposes may be invested not inconsistent with limitations provided by law, the Internal Revenue Code and the Resolution. Application of Gross Earnings of the Dormitory System The provisions of the Prior Bond Resolutions are hereby ratified and confirmed. Nothing in the Resolution shall be construed to impair the rights vested in the Outstanding Bonds. The amounts herein required to be paid into the various funds named in this Section shall be inclusive of payments required in respect to the Outstanding Bonds. The provisions of the Prior Bond Resolutions authorizing the Outstanding Bonds and the provisions of the Resolution are to be construed wherever possible so that the same will not be in conflict. In the event such construction is not possible, the provisions of the resolution first adopted shall prevail until such time as the bonds authorized by said resolution have been paid in full or otherwise satisfied as therein provided at which time the provisions of the Resolution shall again prevail. As long as any of the Outstanding Bonds, the Bonds or Parity Bonds shall be outstanding and unpaid either as to principal or interest, or until all of the Bonds and Parity Bonds then outstanding shall have been discharged and satisfied in the manner provided in the Resolution, the entire Gross Earnings of the System shall be deposited as collected with the Issuer in a fund to be known as the Dormitory Revenue Fund (the "Revenue Fund"), and shall be disbursed in the following priority and only as follows: (a) Operation and Maintenance Fund. The provisions in the Prior Bond Resolutions whereby there was created and established a Dormitory Operation and Maintenance Fund (the "Operation and Maintenance Fund"), to be held by the Issuer with respect to the Outstanding Bonds, the Bonds and Parity Bonds are hereby ratified and confirmed. The money in the Revenue Fund shall first be disbursed to make deposits into the Operation and Maintenance Fund which shall be used to pay Current Expenses. There shall be deposited in the Operation and Maintenance Fund each month an amount sufficient to meet the Current Expenses of the month plus an amount equal to 1/12th of expenses payable on an annual basis, such as insurance. After the first day of the month, further deposits may be made to this account from the 12

15 Revenue Fund to the extent necessary to pay Current Expenses accrued and payable to the extent that funds are not available in the Surplus Fund. (b) Sinking Fund. The provisions in the Prior Bond Resolutions whereby there was established a Dormitory Revenue Bond and Interest Sinking Fund (the "Sinking Fund") to be held by the Issuer, are hereby ratified and confirmed. Money in the Revenue Fund shall next be disbursed to make deposits into the Sinking Fund for payment of principal and interest on the Outstanding Bonds, the Bonds, and Parity Bonds when due. The required amount to be deposited in the Sinking Fund in any month shall be the equal monthly amount necessary to pay in full the installment of interest coming due on the next interest payment date on the then outstanding Outstanding Bonds and the Bonds plus the equal monthly amount necessary to pay in full the installment of principal coming due on the then outstanding Outstanding Bonds and the Bonds on the next succeeding principal payment date until the full amount of such installment is on hand. If for any reason the amount on hand in the Sinking Fund exceeds the required amount, the excess shall forthwith be withdrawn and paid into the Revenue Fund. Money in the Sinking Fund shall be used solely for the purpose of paying principal of and interest on the Outstanding Bonds, the Bonds and Parity Bonds as the same shall become due and payable. Principal and interest coming due at any time when monies in the Revenue Fund hereinafter created are insufficient may be paid when due from other legally available funds of the College available for that purpose including, without limitation, General College Revenues and other funds described in Section 260C.34 of the Code of Iowa. (c) Reserve Fund. The provisions in the Prior Bond Resolutions whereby there was established a Dormitory Revenue Debt Service Reserve Fund (the "Reserve Fund") to be held by the Issuer, are hereby ratified and confirmed. Money in the Revenue Fund shall next be disbursed to maintain a Reserve Fund in an amount equal to the Reserve Fund Requirement. In each month there shall be deposited in the Reserve Fund an amount equal to one hundred percent (100%) of the amount required by the Resolution to be deposited in such month in the Sinking Fund; provided, however, that when the amount on deposit in the Reserve Fund shall be not less than the Reserve Fund Requirement, no further deposits shall be made into the Reserve Fund except to maintain such level, and when the amount on deposit in the Reserve Fund is greater than the balance required above, such additional amounts shall be withdrawn and paid into the Revenue Fund. Money in the Reserve Fund shall be used solely for the purpose of paying principal at maturity of or interest on the Outstanding Bonds, the Bonds and Parity Bonds for the payment of which insufficient money shall be available in the Sinking Fund. Whenever it shall become necessary to so use money in the Reserve Fund, the payments required above shall be continued or resumed until it shall have been restored to the required minimum amount. On the Closing Date, $742,500 ($545,585 from Bond Proceeds and $196,915 of Transferred Proceeds and NOT from Bond Proceeds) shall be deposited in the Reserve Fund. Sinking Fund and Reserve Fund moneys are "restricted yield investments" under the terms and covenants of the Resolution. (d) Operating Reserve Fund. The provisions in the Prior Bond Resolutions whereby there was created and maintained a Dormitory Revenue Operating Reserve Fund (the "Operating Reserve Fund") to be held by the Issuer are hereby ratified and confirmed. Money in the Revenue Fund shall next be disbursed to maintain the Operating Reserve Fund. The minimum amount to be deposited in the Operating Reserve Fund each month shall be $5,000; provided, however, that when the amount of the deposits in the fund shall equal or exceed $50,000, no further monthly deposits need be made into the Operating Reserve Fund except to maintain it at such level. Money in the Operating Reserve Fund not otherwise specially limited by other provisions of the Prior Bond Resolutions or the Resolution shall be used solely for the purpose of paying principal of or interest on the Outstanding Bonds and the Bonds when there shall be insufficient money in the Sinking Fund and the Reserve Fund; and to the extent not required for the foregoing, to pay the cost of extraordinary maintenance expenses or repairs, renewals and replacements not included in the annual budget of revenues and Current Expenses, payment of rentals on any part of the System or payments due for any property purchased as a part of the System, and for capital improvements to the System. Whenever it shall become necessary to so use money in the Operating Reserve Fund, the payments required above shall be continued or resumed until it shall have been restored to the required minimum amount. (e) Subordinate Obligations. Money in the Revenue Fund may next be used to pay principal of and interest on (including reasonable reserves therefor) any other obligations which by their terms shall be payable from the Net Revenues of the System, but subordinate to the Outstanding Bonds, the Bonds and Parity Bonds, and which have been issued for the purposes of extensions and improvements to the System or to retire the Outstanding Bonds, the Bonds or Parity Bonds in advance of maturity, or to pay for extraordinary repairs or replacements to the System. 13

16 (f) Surplus Revenue. All money thereafter remaining in the Revenue Fund at the close of each month may be deposited in any of the funds created by the Resolution, may be used to pay for extraordinary repairs or replacements to the System, or may be used to pay or redeem the Outstanding Bonds, the Bonds or Parity Bonds or any of them, or for any lawful purpose. Money in the Revenue Fund shall be allotted and paid into the various funds and accounts hereinbefore referred to in the order in which the funds are listed, on a cumulative basis on the 10th day of each month, or on the next succeeding business day when the 10th shall not be a business day; and if in any month the money in the Revenue Fund shall be insufficient to deposit or transfer the required amount in any of the funds or accounts, the deficiency shall be made up in the following month or months after payments into all funds and accounts enjoying a prior claim to the revenues shall have been met in full. The Issuer may establish various subaccounts within each of the Funds established in the Prior Bond Resolutions or the Resolution. Failure to make such allocation and payment without cure within thirty days shall constitute an event of default under the Resolution. Investments Moneys on hand in the Revenue Fund and all of the funds provided by the Resolution may be invested only in Permitted Investments or deposited in financial institutions which are members of the Federal Deposit Insurance Corporation, or its equivalent successor, and the deposits in which are insured thereby and all such deposits exceeding the maximum amount insured from time to time by FDIC or its equivalent successor in any one financial institution shall be continuously secured in compliance with Chapter 12C of the Code of Iowa, as amended, or otherwise by a valid pledge of direct obligations of the United States Government having an equivalent market value. All such interim investments shall mature before the date on which the moneys are required for the purposes for which the fund was created or otherwise as herein provided but in no event maturing in more than three years in the case of the Reserve Fund. All income derived from such investments shall be deposited in the Revenue Fund and shall be regarded as Gross Earnings of the Dormitory System. Such investments shall at any time necessary be liquidated and the proceeds thereof applied to the purpose for which the respective fund was created. The Sinking Fund and the Reserve Fund shall be segregated in a separate account but may be invested in the same manner as other funds of the College but designated as a trust fund on the books and records of the College. The Sinking Fund and Reserve Fund shall not be available for any other purposes other than those specified in the Resolution. Covenants Regarding Operation of the Dormitory System The College covenants and agrees with each and every holder of the Bonds and Parity Bonds: (a) Maintenance and Efficiency. That the College will maintain the Dormitory System in good condition and operate it in an efficient manner and at reasonable cost. (b) Rates. There has heretofore been established as required by law, just and equitable rates, fees, rentals or charges for the use of and the services provided by the Dormitory System. On or before the beginning of each Fiscal Year the Governing Body will adopt or continue in effect rates for all services rendered by the Dormitory System determined to be sufficient to produce Net Revenues for the next succeeding Fiscal Year adequate to pay principal and interest requirements and create reserves as provided in the Resolution but not less than one hundred twenty five percent (125%) of the principal and interest requirements of the Fiscal Year. No free use of the Dormitory System by the College or any department, agency or instrumentality of the College shall be permitted except upon the determination of the Governing Body that the rates and changes otherwise in effect are sufficient to provide Net Revenues at least equal to the requirements of this subsection. (c) Insurance. That the College shall maintain insurance for the benefit of the bondholders on the insurable portions of the Dormitory System of a kind and in an amount which normally would be carried by private companies engaged in a similar kind of business including but not limited to business interruption insurance. The proceeds of any 14

17 insurance, except public liability insurance, shall be used to repair or replace the part or parts of the Dormitory System damaged or destroyed, or if not so used shall be placed in the Operating Reserve Fund. (d) Accounting and Audits. The College will cause to be kept proper books and accounts adapted to the Dormitory System and in accordance with generally accepted accounting practices, and will cause the books and accounts to be audited on an annual basis by an Independent Auditor which may be the Auditor of the State of Iowa and will provide copies of the audit report to the Original Purchaser of the Bonds, if requested. The holders of any of the Bonds and Parity Bonds shall have at all reasonable times the right to inspect the Dormitory System and the records, accounts and data of the College relating thereto. It is further agreed that if the College shall fail to provide the audits and reports required by this subsection, the holder or holders of twenty-five percent (25%) of the then outstanding Bonds and Parity Bonds may cause such audits and reports to be prepared at the expense of the College. (e) State Laws. That the College will faithfully and punctually perform all duties with reference to the Dormitory System required by the Constitution and laws of the State of Iowa, including the making and collecting of reasonable and sufficient rates, fees, rentals or charges as above provided, and will segregate the revenues of the Dormitory System and apply the revenues to the funds specified in the Resolution. (f) Property. The College will not sell, lease, mortgage or in any manner dispose of the Dormitory System, or any capital part thereof, including any and all extensions and additions that may be made thereto, until satisfaction and discharge of all of the Bonds and Parity Bonds shall have been provided for in the manner provided in the Resolution and the Mortgage; provided, however, that this covenant shall not be construed to prevent the disposal by the College of property which in the judgment of its Governing Body has become inexpedient or unprofitable to use in connection with the Dormitory System, or if it is to the advantage of the Dormitory System that other property of equal or higher value be substituted therefor, and provided further that the proceeds of the disposition of such property shall be placed in a revolving fund and used in preference to other sources for capital improvements to the Dormitory System. Any such proceeds of the disposition of property acquired with the proceeds of the Bonds or Parity Bonds shall not be used to pay principal or interest on the Bonds and Parity Bonds or for payments into the Sinking or Reserve Funds. (g) Budget. That the Governing Body of the College will adopt a Dormitory System budget of Gross Earnings, Current Expenses and Net Revenues on or before the end of each fiscal year. Such budget shall take into account Gross Earnings and Current Expenses during the current and last preceding fiscal years. The College will incur no Current Expense not included in such budget, and will not permit total Current Expenses to exceed the budget, unless the Governing Body shall first have adopted a Resolution declaring the necessity of such Current Expenses. (h) Transfers to Meet Expenses. To the extent that debt service coverage from Net Revenues falls below the levels required in Section (b) above, the College will transfer legally available funds on an annual basis from its general fund, plant fund or such other funds as permitted by Iowa law an amount sufficient to cover Current Expenses of the Dormitory System. Prior Lien and Parity Bonds; Subordinate Obligations So long as the Series 2005B Bonds are outstanding and remain a lien on the Net Revenues of the System, Section 22 of the resolution authorizing the Series 2005B Bonds shall apply; thereafter, and so long as the Series 2009B Bonds are outstanding and remain a lien on the Net Revenues of the System, Section 22 of the resolution authorizing the Series 2009B Bonds shall apply; thereafter, and so long as the Series 2010A Bonds are outstanding and remain a lien on the Net Revenues of the System, Section 22 of the resolution authorizing the Series 2010A Bonds shall apply; thereafter, and so long as the Series 2012A Bonds are outstanding and remain a lien on the Net Revenues of the System, Section 22 of the resolution authorizing the Series 2012A Bonds shall apply; thereafter, and so long as the Series 2012B Bonds are outstanding and remain a lien on the Net Revenues of the System, Section 22 of the resolution authorizing the Series 2012B Bonds shall apply; thereafter, and so long as the Bonds are outstanding and remain a lien on the Net Revenues of the System, thereafter, this Section shall apply. The Issuer will issue no other Bonds or obligations of any kind or nature payable from or enjoying a lien or claim on the Net Revenues of the System having priority over the Bonds or Parity Bonds. 15

18 Additional Bonds may be issued on a parity and equality of rank with the Bonds with respect to the lien and claim of such Additional Bonds to the Net Revenues of the System and the money on deposit in the funds adopted by the Resolution, for the following purposes and under the following conditions, but not otherwise: (a) For the purpose of refunding any Bonds or Parity Bonds outstanding, or making extensions, additions, improvements or replacements to the System, if all of the following conditions shall have been met: (i) before any such Bonds ranking on a parity are issued, there will have been procured and filed with the Secretary, a statement of an Independent Auditor not in the regular employ of the Issuer, reciting the opinion based upon necessary investigations that the Net Revenues of the System (with adjustments as hereinafter provided) meet either (A) or (B) as follows: (A) For each of the two (2) preceding Fiscal Years Net Revenues are not less than one hundred ten percent (110%) of the maximum annual principal and interest requirements of the then outstanding bonds and the bonds proposed to be issued for any subsequent Fiscal Year during the life of the then outstanding bonds and the bonds proposed to be issued; or (B) For each of the future three (3) Fiscal Years following the estimated completion of the acquisition, construction, renovation or replacement being paid for with the proceeds of the Additional Bonds estimated annual Net Revenues of the System (including the facilities being paid for with the proceeds of the Additional Bonds) are not less than one hundred twenty-five percent (125%) of the maximum annual principal and interest requirements of the then outstanding Bonds and the bonds proposed to be issued. For purpose of determining the Net Revenues of the System for a fiscal year as aforesaid, the amount of the gross revenues for such year may be adjusted by an Independent Auditor not in the regular employ of the Issuer, so as to reflect any changes in the amount of such revenues which would have resulted had any revisions of the schedule of rates or charges imposed at or prior to the time of the issuance of any such Additional Bonds been in effect during all of such Fiscal Year. (ii) the Additional Bonds must be payable as to principal and as to interest on the same month and day as the Bonds herein authorized. (iii) for purposes of this Section, "preceding Fiscal Year" shall be the most recently completed fiscal year for which audited financial statements prepared by a certified public accountant are issued and available, but in no event a fiscal year which ended more than eighteen months prior to the date of issuance of the Additional Bonds. The Issuer may issue bonds, notes or other obligations that are subordinate to the Bonds and Parity Bonds without meeting the requirements of this section. The College may issue bonds, notes or other obligations that are subordinate to the Bonds and Parity Bonds without meeting the requirements of this section. Discharge and Satisfaction of Bonds The covenants, liens and pledges entered into, created or imposed pursuant to the Resolution may be fully discharged and satisfied with respect to the Bonds and Parity Bonds, or any of them, in any one or more of the following ways: (a) By paying the Bonds or Parity Bonds when the same shall become due and payable; and (b) By depositing in trust with the Treasurer, or with a corporate trustee designated by the Governing Body for the payment of the obligations and irrevocably appropriated exclusively to that purpose an amount in cash or direct obligations of the United States the maturities and income of which shall be sufficient to retire at maturity, or by redemption prior to maturity on a designated date upon which obligations may be redeemed, all of such obligations 16

19 outstanding at the time, together with the interest thereon to maturity or to the designated redemption date, premiums thereon, if any that may be payable on the redemption of the same; provided that proper notice of redemption of all such obligations to be redeemed shall have been previously published or provisions shall have been made for such publication. Upon such payment or deposit of money or securities, or both, in the amount and manner provided by this Section, all liability of the Issuer with respect to the Bonds or Parity Bonds shall cease, determine and be completely discharged, and the holders thereof shall be entitled only to payment out of the money or securities so deposited. Amendment of Resolution Without Consent of Bondholders The College may, without the consent of or notice to any of the holders of the Bonds and Parity Bonds, amend or supplement the Resolution for any one or more of the following purposes: (a) to cure any ambiguity, defect, omission or inconsistent provision in the Resolution or in the Bonds or Parity Bonds; or to comply with any application provision of law or regulation of federal or state agencies; provided, however, that such action shall not materially adversely affect the interests of the holders of the Bonds or Parity Bonds; (b) to change the terms or provisions of the Resolution to the extent necessary to prevent the interest on the Bonds or Parity Bonds from being includable within the gross income of the holders thereof for federal income tax purposes; (c) to grant to or confer upon the holders of the Bonds or Parity Bonds any additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon the holders of the Bonds; (d) to add to the covenants and agreements of the College contained in the Resolution other covenants and agreements of, or conditions or restrictions upon, the College or to surrender or eliminate any right or power reserved to or conferred upon the College in the Resolution; or law. (e) to subject to the lien and pledge of the Resolution additional pledged revenues as may be permitted by Amendment of Resolution Requiring Consent of Bondholders The Resolution may be amended from time to time if such amendment shall have been consented to by holders of not less than two-thirds in principal amount of the Bonds and Parity Bonds at any time outstanding (not including in any case any Bonds which may then be held or owned by or for the account of the College, but including such refunding bonds as may have been issued for the purpose of refunding any of such Bonds if such refunding bonds shall not then be owned by the College); but the Resolution may not be so amended in such manner as to: (a) Make any change in the maturity or interest rate of the Bonds, or modify the terms of payment of principal of or interest on the Bonds or any of them or impose any conditions with respect to such payment; and (b) Materially affect the rights of the holders of less than all of the Bonds and Parity Bonds then outstanding; (c) Reduce the percentage of the principal amount of Bonds, the consent of the holders of which is required to effect a further amendment. Whenever the College shall propose to amend the Resolution under the provisions summarized above, it shall cause notice of the proposed amendment to be filed with the Original Purchaser and to be mailed by certified mail to each registered owner of any Bond as shown by the records of the Registrar. Such notice shall set forth the nature of the proposed amendment and shall state that a copy of the proposed amendatory Resolution is on file in the office of the Secretary of the Board of Directors. Whenever at any time within one year from the date of the mailing of the notice there shall be filed with the Secretary of the Board of Directors an instrument or instruments executed by the holders of at least two-thirds in aggregate principal amount of the Bonds then outstanding as defined in the Resolution, which instrument or instruments shall refer to the proposed amendatory Resolution described in the notice and shall specifically consent to and approve the 17

20 adoption thereof, thereupon, but not otherwise, the Governing Body of the College may adopt such amendatory Resolution and such Resolution shall become effective and binding upon the holders of all of the Bonds and Parity Bonds. Any consent given by the holder of a Bond pursuant to the provisions of the Resolution shall be irrevocable for a period of six months from the date of the instrument evidencing such consent and shall be conclusive and binding upon all future holders of the same Bond during such period. Such consent may be revoked at any time after six months from the date of such instrument by the holder who gave such consent or by a successor in title by filing notice of such revocation with the Secretary of the Board of Directors. The fact and date of the execution of any instrument under the provisions of the Resolution may be proved by the certificate of any officer in any jurisdiction who by the laws thereof is authorized to take acknowledgments of deeds within such jurisdiction that the person signing such instrument acknowledged before him the execution thereof, or may be proved by an affidavit of a witness to such execution sworn to before such officer. The amount and numbers of the Bonds held by any person executing such instrument and the date of his holding the same may be proved by an affidavit by such person or by a certificate executed by an officer of a bank or trust company showing that on the date therein mentioned such person had on deposit with such bank or trust company the Bonds described in such certificate. General Information THE COLLEGE Iowa Western Community College, founded in 1966, is a state supported institution of post high school education and is comprised of all or a major portion of Cass, Fremont, Harrison, Mills, Page, Pottawattamie and Shelby counties and a minor part of six additional counties located in southwest Iowa. The College offers instruction in career education, adult and continuing education and the first two years of college and university study. Iowa Western exists to serve the needs of adults who can benefit from further education and guidance, whether by specially designed occupational programs, preprofessional college transfer programs or adult education of another type. Iowa Western Community College is a state-supported community college. The North Central Association of Colleges and Schools, the Iowa State Board of Education and the Veterans Administration for the training of veterans under the provisions of the G.I. Bill of Rights accredit the College. The college is an institutional member of the American Association of Community Colleges and the Iowa Association of Community College Trustees. All courses equivalent to college and university work are accepted by colleges and universities of Iowa and by most educational institutions outside of Iowa. The Council Bluffs Campus, which includes the college administrative offices, is situated on a 282-acre site located 2½ miles northeast of the Council Bluffs business district. The instructional services offered at the Council Bluffs Center are administered through the departments of Business, Fine Arts, Health and Physical Education, Language Arts, Science and Mathematics, Social Sciences, Agriculture, Health Occupations, Office Occupations and Trade and Industrial Education. In addition, Student Services, and the Learning Resources Center provide supportive services for students and staff. College educational facilities include Clark Hall, Hoover Hall, Kanseville Center, Looft Hall, Dodge Hall, Art Center, Aviation Maintenance, Ashley Hall, Fremont Hall and Lewis Hall. College Organization and Services The College is governed by a nine member Board of Directors. The Board members are elected from nine districts. The College is regulated by the Iowa State Department of Education. The College employs approximately 700 full and part-time employees including adjunct instructors. The full-time faculty of the College are represented by the Education Association under a one-year contract which expires on August 31, Facility engineering staff, full-time only, are represented by the International Union of Operating Engineers Local 234 under a one-year contract that expires on June 30, See APPENDIX A for additional information on the College. 18

21 PLAN OF FINANCING Approximately $2,568,085 in proceeds of the Bonds, along with approximately $196,915 of other funds of the College, will be used to currently refund a portion of the College's outstanding Dormitory Revenue Bonds, Series 2009A (the "Series 2009A Bonds"). The Refunded Bonds are described below. Dormitory Revenue Bonds, Series 2009A (Originally dated February 1, 2009) Interest Rate Principal Amount Maturity June % $ 300, , ,155, Approximately $4,720,000 of the Bond proceeds will be used, along with other funds of the College, to pay the costs of acquiring, improving, and remodeling Reiver Tower Dormitory, as more fully described under "DESCRIPTION OF THE BONDS Uses of Bond Proceeds." The remaining portion of the Bond proceeds will be used to fund a portion of the Debt Service Reserve Fund for the Bonds and pay the costs of issuance of the Bonds. After the issuance of the Bonds and the refunding of the Refunded Bonds, the College will have approximately $45,355,000 aggregate principal amount of outstanding revenue bonded indebtedness of the Dormitory System. The College does not expect to issue any additional dormitory revenue debt in the foreseeable future. System Outstanding Dormitory Revenue Bonded Debt Service(1) Fiscal Series A Series B The Bonds Series B Series A Series B Series A Total Less Total Total Year 3/15/12 3/15/12 2/3/15 6/1/05 2/1/09 10/1/09 10/1/10 Principal BAB Interest P&I , , , , ,000 1,770, ,373 1,595,942 3,172, , , , ,000 1,645, ,944 1,652,858 3,106, , , , ,000 1,690, ,187 1,613,928 3,115, , , , ,000 1,735, ,109 1,571,600 3,121, , , , ,000 1,785, ,660 1,523,900 3,127, , , , ,000 1,840, ,890 1,473,249 3,135, , , , ,000 1,890, ,729 1,417,121 3,133, , , , ,000 1,955, ,258 1,356,351 3,142, , , , ,000 2,030, ,410 1,290,329 3,155, , , ,425, ,000 9,250, ,173 1,218,559 10,309, , , , ,000 2,385, ,840 3,087, , , , ,000 2,465, ,723 3,091, , , , ,000 2,545, ,143 3,090, , , ,000 1,010,000 2,635, ,415 3,092, , , ,000 called on 1,050,000 2,725, ,781 3,088, , , ,000 1,100,000 2,825, ,190 3,089,190 2/3/ ,930,000 2,930, ,040 3,088, ,235,000 1,235, ,165 1,283,165 Totals: 6,215,000 8,960,000 7,405, , ,290,000 13,305,000 45,335,000-1,783,732 17,880,134 61,431,402 Original Par: 6,700,000 9,900,000 7,405,000 1,205,000 3,000,000 9,865,000 15,450,000 Note: (1) Source: The College 19

22 Historical Net Revenues and Debt Service Coverage Combined Combined Combined Combined Fiscal Year Combined Audit Audit Audit Audit Unaudited Revenues Rental Income Combined 3,541,767 4,241,716 4,896,690 4,960,484 5,413,775 Other Income 86,842 96,444 97,196 97,786 99,059 Total Income 3,628,609 4,338,161 4,993,886 5,058,270 5,512,834 Operating Expenditures Salaries & Benefits 540, , , , ,154 Contracted Services 230, , , , ,277 Utilities 78,476 79,560 85,563 81,059 76,995 Communications 163, , , , ,735 Supplies 79, , , , ,328 Other Services 43,342 48,721 61,443 96,945 38,397 Travel ,612 5,391 1,092 Insurance 18,780 20,514 22,070 22,711 22,577 Maintenance & Repairs 332, , , , ,213 Fixed Equipment 5,350 5,810 8,500 0 Office Expense 11,381 12,110 15,602 8,373 7,214 Furniture 70,882 94,162 84,438 57,563 0 Miscellaneous 13,459 64,941 33,212 52,375 13,001 Total Operating Expenditures 1,583,389 1,889,358 2,132,832 2,248,587 2,187,983 Operating Income 2,045,220 2,448,802 2,861,054 2,809,683 3,324,851 Less Debt Service Principal 455, ,000 1,105,000 1,560,000 1,830,000 Interest 1,221,908 1,626,280 1,886,931 1,661,692 1,426,540 Total Debt Service 1,676,908 2,486,280 2,991,931 3,221,692 3,256,540 Net Cash-flow 368,312-37, , ,009 68,311 Direct Bond Coverage Other Pledged Revenues available Net Food Service Revenues 103, , , , ,130 Utilities, Maintenance, Insurance & Other * Bookstore net income 151, , , , ,898 Other 2 Total Other Pledged Revenues 255, , , ,639 1,181,028 Total Direct & Pledged Revenues 2,300,568 3,044,345 3,638,414 3,780,322 4,505,879 Coverage Available Units: 919 1,064 1,196 1,196 1,317 Actual Occupancy (units)* ,124 1,100 1,289 *The College did not assume an enrollment increase. Source: The College 20

23 The following financial projections were developed within the College through the Vice President of Finance & Operations, Thomas Johnson. Projected Net Revenues and Debt Service Coverage FY 2015 Pro-forma numbers FY16 Pro-forma numbers Fiscal Year Reiver Reiver Reiver Combined Reiver Reiver Reiver Combined Tower Village Suites Forecast Tower Village Suites Forecast Revenues Rental Income Combined 824, ,600 4,406,400 5,829, , ,400 4,536,960 6,002,610 Other Income 11,500 6,664 25,000 43,164 11,500 7,500 25,000 44,000 Total Income 835, ,264 4,431,400 5,872, , ,900 4,561,960 6,046,610 Operating Expenditures Salaries & Benefits 265, , , , , , , ,835 Contracted Services 107,250 75, , , ,468 77, , ,126 Utilities Communications 36,475 35, , ,680 36,840 36, , ,315 Supplies 55,000 40,000 53, ,752 55,550 41,796 41, ,142 Other Services 33,500 5,000 32,150 70,650 33,835 6,000 19,255 59,090 Travel 1, ,000 2,251 1,033 1,000 1,000 3,033 Insurance Maintenance & Repairs 35,000 55, , ,605 15,000 55, , ,673 Fixed Equipment 7, ,500 15,000 7,500 7,500 7,500 22,500 Office Expense 2,500 1,806 1,806 6,112 2,525 5,793 5,793 14,111 Furniture 65,000 25,000 50, ,000 75,000 25,000 50, ,000 Miscellaneous 7,500 7,044 7,000 21,544 7,725 7,500 7,500 22,725 Total Operating Expenditures 616, ,036 1,386,948 2,363, , ,827 1,414,309 2,423,550 Operating Income 219, ,228 3,044,452 3,508, , ,074 3,147,651 3,623,060 Less Debt Service Principal 1,825,000 1,645,000 Interest 1,293,996 1,528,696 Total Debt Service ,118, ,173,696 Net Cashflow 389, ,365 Direct Bond Coverage Other Pledged Revenues available Net Food Service Revenues 530, ,792 Utilities, Maintenance, Insurance & Other * Bookstore net income 413, ,650 Other 2 Total Other Pledged Revenues , ,442 Total Direct & Pledged Revenues 219, ,228 3,044,452 4,452, , ,074 3,147,651 4,613,502 Coverage Available Units: , ,317 Actual Occupancy (units)* , ,226 Assumed units rented, fall Assumed units rented, spring Rental rate (actual FY15; assumed thereafter) 1,675 1,825 2,700 1,725 1,880 2,780 *The College did not assume an enrollment increase. Source: The College 21

24 Presented below is a summary of the balances in the various funds established under the Resolution: Operation and Maintenance Fund (as of 6/30/2014) $ 163,779 Sinking Fund (as of 12/1/2014) 912,500 Reserve Fund (as of 12/1/2014) 3,065,051 Operating Reserve Fund (as of 12/1/2014) 5,000 Subordinate Obligations (as of 12/1/2014) 0 Surplus Revenues (as of 6/30/2014) 4,921,291 Source: The College FINANCIAL INFORMATION Financial Reports The College's financial statements are audited annually by certified public accountants. The College's financial statements are completed on a modified accrual basis of accounting consistent with generally accepted accounting principles applicable to governmental entities. The College's financial statements were completed in accordance with Government Accounting Standard Number 34. See APPENDIX B for more detail. No Consent or Updated Information Requested of the Auditor The tables and excerpts (collectively, the "Excerpted Financial Information") contained in this "FINANCIAL INFORMATION" section and in APPENDIX B are from the audited financial statements of the College, including the audited financial statements for the fiscal year ended June 30, 2014, (the "2014 Audit"). The 2014 Audit has been prepared by Denman & Company, LLP, Certified Public Accountants and Business Consultants, West Des Moines, Iowa (the "Auditor"), and approved by formal action of the Board. The College has not requested the Auditor to update information contained in the Excerpted Financial Information; nor has the College requested that the Auditor consent to the use of the Audited Financial Statements in this Official Statement. Other than as expressly set forth in this Official Statement, the financial information contained in the Excerpted Financial Information has not been updated since the date of the 2014 Audit. The inclusion of the Excerpted Financial Information in this Official Statement in and of itself is not intended to demonstrate the fiscal condition of the College since the date of the 2014 Audit. Questions or inquiries relating to financial information of the College since the date of the 2014 Audit should be directed to the College. REGISTRATION, TRANSFER AND EXCHANGE See also APPENDIX C, BOOK-ENTRY SYSTEM for information on registration, transfer and exchange of book-entry Bonds. The Bonds will be initially issued as book-entry Bonds. The College shall cause books (the "Bond Register") for the registration and for the transfer of the Bonds to be kept at the principal office of the Registrar in Council Bluffs, Iowa. The College will authorize to be prepared, and the Registrar shall keep custody of, multiple Bond blanks executed by the College for use in the transfer and exchange of Bonds. Any Bond may be transferred or exchanged, but only in the manner, subject to the limitations, and upon payment of the charges as set forth in the Bond Resolution. Upon surrender for transfer or exchange of any Bond at the principal office of the Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Registrar and duly executed by the registered owner or such owner's attorney duly authorized in writing, the College shall execute and the Registrar shall authenticate, date and deliver in the name of the registered owner, transferee or transferees (as the case may be) a new fully registered Bond or Bonds of the same maturity and interest rate of authorized denominations, for a like aggregate principal amount. The execution by the College of any fully registered Bond shall constitute full and due authorization of such Bond, and the Registrar shall thereby be authorized to authenticate, date and deliver such Bond, provided, however, the principal amount of outstanding Bonds of each maturity authenticated by the Registrar shall not exceed the authorized principal amount of Bonds for such maturity less Bonds previously paid. 22

25 The Registrar shall not be required to transfer or exchange any Bond following the close of business on the 15th day of the month next preceding any interest payment date on such Bond, nor to transfer or exchange any Bond after notice calling such Bond for redemption has been mailed, nor during a period of fifteen days next preceding mailing of a notice of redemption of any Bonds. The person in whose name any Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of the principal of or interest on any Bonds shall be made only to or upon the order of the registered owner thereof or such owner's legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. No service charge shall be made for any transfer or exchange of Bonds, but the College or the Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Bonds. Federal Tax Exemption TAX MATTERS Federal tax law contains a number of requirements and restrictions that apply to the Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of Bond proceeds and facilities financed with Bond proceeds, and certain other matters. The College 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 College's compliance with the above-referenced covenants, under present law, in the opinion of Bond Counsel, the interest on the Bonds is excludable from gross income for federal income tax purposes and interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, with respect to corporations (as defined for federal income tax purposes), such interest is included in adjusted current earnings for the purpose of determining the alternative minimum tax imposed on such corporations. Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will not express any opinion as to such collateral tax consequences. Prospective purchasers of the Bonds should consult their tax advisors as to collateral federal income tax consequences. State of Iowa Tax Exemption In the opinion of Bond Counsel, under existing law, the interest on the Bonds is exempt from the taxes imposed by Division II (Personal Net Income Tax) and Division III (Business Tax on Corporations) of Iowa Code Chapter 422, as amended; it should be noted, however, that interest on the Bonds is required to be included in determining adjusted current earnings to be used in computing the "state alternative minimum taxable income" of corporations and financial institutions for purposes of Section and of the Iowa Code, as amended. Interest on the Bonds is subject to the taxes imposed by Division V (Taxation of Financial Institutions) of Iowa Code Chapter 422, as amended. Bond Counsel expresses no opinion regarding other State tax consequences arising with respect to the Bonds. Qualified Tax Exemption Obligations The College will designate the Bonds as "qualified tax-exempt obligations" under the exception provided in Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), which affords banks and certain other financial institutions more favorable treatment of their deduction for interest expense than would otherwise be allowed under Section 265(b)(2) of the Code. However, the College's failure to comply with the requirements of this Code Section may cause the Bonds not to be "qualified tax-exempt obligations" and banks and certain other financial institutions would 23

26 not receive more favorable treatment of their deduction for interest expense than would otherwise be allowed under Section 265(b)(2) of the Code. Neither the College nor any entities issuing obligations on behalf of the College has, as of the date of this Preliminary Official Statement, issued any obligations in calendar year Other than the Bonds and approximately $2,505,000 General Obligation Bonds, Series 2015, to be dated January 5, 2015, neither the College nor other entities issuing obligations on behalf of the College reasonably expect to issue additional obligations during the calendar year Discount and Premium Bonds The initial public offering price of certain Bonds may be less than the amount payable on such Bonds at maturity ("Discount Bonds"). Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds. It is possible that, under applicable provisions governing determination of state and local income taxes, accrued interest on Discount Bonds may be deemed to be received in the year of accrual even though there will not be a corresponding cash payment. The initial public offering price of certain Bonds may be greater than the amount of such Bonds at maturity ("Premium Bonds"). Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. Other Tax Advice In addition to the income tax consequences described above, potential investors should consider the additional tax consequences of the acquisition, ownership, and disposition of the Bonds. For instance, state income tax law may differ substantially from state to state, and the foregoing is not intended to describe any aspect of the income tax laws of any state. Therefore, potential investors should consult their own tax advisors with respect to federal tax issues and with respect to the various state tax consequences of an investment in Bonds. Audits The Internal Revenue Service (the "Service") has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includable in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Bonds. If an audit is commenced, under current procedures the Service may treat the College as a taxpayer and the bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded, regardless of the ultimate outcome. Reporting and Withholding Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, including the Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any bond owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any bond owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes. Tax Legislation Legislation affecting tax-exempt obligations is regularly considered by the United States Congress and may be considered by the Iowa legislature. Court proceedings may also be filed, the outcome of which could modify the tax treatment. There can be no assurance that legislation enacted or proposed, or actions by a court, after the date of issuance of the Bonds will not have an adverse effect on the tax status of interest or other income on the Bonds or the market value 24

27 or marketability of the Bonds. These adverse effects could result, for example, from changes to federal or state income tax rates, changes in the structure of federal or state income taxes (including replacement with another type of tax), or repeal (or reduction in the benefit) of the exclusion of interest on the Bonds from gross income for federal or state income tax purposes for all or certain taxpayers. Some legislative proposals may carry retroactive effective dates, that, if enacted, could alter or amend the tax matters referred to in this section or affect the market value of the Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal or state tax legislation. The Opinion The form of Legal Opinion, in substantially the form set out in APPENDIX E to this Official Statement, will be delivered at closing. 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 College described in this section. No ruling has been sought from the Service with respect to the matters addressed in the opinion of Bond Counsel and Bond Counsel's opinion is not binding on the Service, nor does the rendering of the opinion guarantee the outcome of any legal dispute that may arise out of the transaction. 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. Enforcement There is no bond trustee or similar person to monitor or enforce the terms of the resolution for issuance of the Bonds. In the event of a default in the payment of principal of or interest on the Bonds, there is no provision for acceleration of maturity of the principal of the Bonds. Consequently, the remedies of the owners of the Bonds (consisting primarily of an action in the nature of mandamus requiring the College and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. The owners of the Bonds cannot foreclose on property within the boundaries of the College or sell such property in order to pay the debt service on the Bonds. In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in Bond Counsel's opinion. The opinion will state, in part, that the obligations of the College 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. Opinions 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 College described in this section. No ruling has been sought from the Service with respect to the matters addressed in the opinion of Bond Counsel and Bond Counsel's opinion is not binding on the Service. Bond Counsel assumes no obligation to update its opinion after the issue date to reflect any further action, fact or circumstance, or change in law or interpretation, or otherwise. See APPENDIX E for draft forms of legal opinions for the Bonds. CONTINUING DISCLOSURE The College will enter into a Continuing Disclosure Certificate (together, the "Undertaking") for the benefit of the beneficial owners of the Bonds to send certain information annually and to provide notice of certain events to the 25

28 Municipal Securities Rulemaking Board ("MSRB") pursuant to the requirements of Section (b)(5) of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission (the "Commission") under the Securities Exchange Act of The information to be provided, the events which will be noticed on an occurrence basis and a summary of other terms of the Undertaking, including termination, amendment and remedies, are set forth in APPENDIX F FORM OF CONTINUING DISCLOSURE CERTIFICATE. The Issuer believes it has materially complied in all respects with its prior Undertakings. However, the Issuer provides the following information in accordance with the reporting requirements of paragraph (f)(3) of the Rule. The Issuer filed Annual Financial Information within timeframe prescribed by its prior Undertakings for the periods ending 6/30/2012 and 6/30/2013. For the fiscal year ended 6/30/12, the Audited Financial Statement was filed one day after the date required by prior Undertakings. For the fiscal year ended 6/30/2013, the Audit was filed timely along with the Annual Financial Information. For the fiscal years ending 6/30/2011 and before, the Issuer provided copies of the Audited Financial Statement, which data did not include all of the required Annual Financial Information, and not necessarily within the timeline prescribed by the prior Undertakings. On October 3, 2012, the Issuer updated the filings for the fiscal years ended 6/30/09 through 6/30/11. On March 11, 2014, the Issuer filed a material event notice indicating its failure to file unaudited financial statements in the years in which Audits were not available within the prescribed timeline. In addition, in 2012, the Issuer refinanced previously issued general obligation bonds dated 3/1/04, dormitory revenue bonds dated 6/1/06 and 8/1/07, and plant fund capital loan notes, dated 1/1/06 and 1/1/07. The Issuer failed to file a material event notice surrounding the call of those refinanced bonds and notes at the time of refinancing, but filed such material event notice on March 12, The official statements for the Refunded Bonds was available on EMMA. A failure by the College to comply with the Undertaking will not constitute a default under the Bond Resolution and beneficial owners of the Bonds are limited to the remedies described in the Undertaking. A failure by the College to comply with the Undertaking must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Bonds in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Bonds and their market price. Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5) of the Rule. LITIGATION There is no litigation of any nature now pending or threatened restraining or enjoining the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds or any proceedings of the College taken with respect to the issuance or sale thereof. LEGAL MATTERS The Bonds are subject to approval as to certain legal matters by Ahlers & Cooney, P.C., Des Moines, Iowa, as Bond Counsel. Bond Counsel has not examined nor attempted to examine or verify any of the financial or statistical statements, or data contained in this Official Statement, and will express no opinion with respect thereto. The Form of Legal Opinion is set forth under APPENDIX E. OFFICIAL STATEMENT AUTHORIZATION This Official Statement has been authorized for distribution to prospective purchasers of the Bonds. All statements, information, and statistics herein are believed to be correct but are not guaranteed by the consultants or by the College, and all expressions of opinion, whether or not so stated, are intended only as such. The auditors have not performed any additional review and have not consented to the inclusion of the excerpts from the financial statements shown in APPENDIX B. INVESTMENT RATING The Bonds have been rated "A2" by Moody's Investors Service ("Moody's"). The College has supplied certain information and material concerning the Bonds and the College to Moody's as part of its application for an investment rating on the Bonds. Generally, such rating service bases its rating on such information and material, and also on such 26

29 investigations, studies and assumptions that it may undertake independently. There is no assurance that such rating will continue for any given period of time or that it may not be lowered or withdrawn entirely by such rating service if, in its judgment, circumstances so warrant. Any such downward change in or withdrawal of such ratings may have an adverse effect on the secondary market price of the Certificates. An explanation of the significance of investment ratings may be obtained from the rating agency: Moody's Investors Service, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007, Telephone (212) UNDERWRITING Robert W. Baird & Co., Inc., (the "Underwriter") has agreed to purchase all but not less than all of Bonds at a price of $7,310, reflecting a net original issue premium of $11, and an underwriting discount of $125, It is anticipated that delivery of the Bonds will occur on the date shown on the cover page hereof. The Bonds may be offered and sold to certain dealers (including the Underwriter or other dealers depositing the Bonds into investment trusts) at prices or yields other than such public offering prices or yields shown on the Final Official Statement, and such public offering prices or yields may be changed, from time to time, by the Underwriter. FINANCIAL ADVISOR The College has engaged Piper Jaffray & Co. as financial advisor (the "Financial Advisor") in connection with the issuance and sale of the Bonds. The Financial Advisor is a Registered Financial Advisor in accordance with the rules of the Municipal Securities Rulemaking Board (the "MSRB"). The Financial Advisor will not participate in the underwriting of the Bonds. The Financial Advisor is not obligated to undertake any independent verification of or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement, nor is the Financial Advisor obligated by the College's continuing disclosure undertaking. CERTIFICATION I have examined this Official Statement dated January 19, 2015, for the Bonds, and to the best of my belief knowledge and information, believe it to be true and correct and will provide to the purchaser(s) of the Bonds at the time of delivery a Certificate confirming to the purchaser that to the best of my knowledge, belief, and information in the Official Statement was at the time of acceptance of the bid for the Bonds and, including any addenda thereto, was at the time of delivery of the Bonds true and correct in all material respects and does not include any untrue statement of a material fact, nor does it omit the statement of any material fact required to be stated therein, or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. /s/ Thomas Johnson Vice-President of Finance and Operations IOWA WESTERN COMMUNITY COLLEGE (Merged Area XIII) Council Bluffs, Iowa 27

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31 APPENDIX A - INFORMATION ABOUT THE ISSUER THE BONDS CONSTITUTE A VALID AND BINDING SPECIAL OBLIGATION OF THE COLLEGE PAYABLE SOLELY FROM THE SOURCES PROVIDED IN THE RESOLUTION, THE INDENTURE AND DESCRIBED HEREIN. THE BONDS WILL BE SECURED BY A VALID FIRST LIEN ON THE FUTURE NET REVENUES OF THE IOWA WESTERN COMMUNITY COLLEGE DORMITORY SYSTEM FOR STUDENTS (THE "DORMITORY SYSTEM"), INCLUDING OTHER INCIDENTAL FACILITIES PLEDGED BY THE RESOLUTION ADOPTED BY THE BOARD OF DIRECTORS. THE BONDS ARE FURTHER SECURED BY A MORTGAGE ON THE IMPROVEMENTS CONSTRUCTED WITH THE PROCEEDS OF THE BONDS AND THE REFUNDED BONDS WHICH ARE PART OF THE DORMITORY SYSTEM AND THE MONEY HELD PURSUANT TO THE FUNDS AND ACCOUNTS. THE BONDS REPRESENT NO DIRECT TAX LIEN ON THE COLLEGE, AND UNDER NO CIRCUMSTANCES SHALL THE BONDHOLDERS BE ENTITLED TO OBTAIN A DEFICIENCY JUDGMENT AGAINST THE COLLEGE. As described above and in the Official Statement, the Bonds are not a general obligation of the College, and are not payable in any manner by taxation nor from any general revenues of the College; but instead are payable solely from the sources described in the Resolution, and the College shall not be liable by reason of the failure of the Net Revenues to be sufficient for the payment of the Bonds. A-1

32 General Information Iowa Western Community College, founded in 1966, is a state supported institution of post high school education and is comprised of all or a major portion of Cass, Fremont, Harrison, Mills, Page, Pottawattamie and Shelby counties and a minor part of six additional counties located in southwest Iowa. The College offers instruction in career education, adult and continuing education and the first two years of college and university study. Iowa Western exists to serve the needs of adults who can benefit from further education and guidance, whether by specially designed occupational programs, pre-professional college transfer programs or adult education of another type. Iowa Western Community College is a state-supported community college. The North Central Association of Colleges and Schools, the Iowa State Board of Education and the Veterans Administration for the training of veterans under the provisions of the G.I. Bill of Rights accredit the College. The college is an institutional member of the American Association of Community Colleges and the Iowa Association of Community College Trustees. All courses equivalent to college and university work are accepted by colleges and universities of Iowa and by most educational institutions outside of Iowa. The Council Bluffs Campus, which includes the college administrative offices, is situated on a 282-acre site located 2½ miles northeast of the Council Bluffs business district. The instructional services offered at the Council Bluffs Campus are administered through the departments of Business, Fine Arts, Health and Physical Education, Language Arts, Science and Mathematics, Social Sciences, Agriculture, Health Occupations, Office Occupations and Trade and Industrial Education. In addition, Student Services, and the Learning Resources Center provide supportive services for students and staff. College educational facilities include Clark Hall, Stuart Hall, Kanseville Center, Looft Hall, Dodge Hall, Art Center, Aviation Maintenance, Ashley Hall, Fremont Hall and Lewis Hall. Credit Hours Total Credit hours for the past four years are as follows: Fiscal Year Total Credit Hours , , , , ,617 Staff Presented below are the total full-time employees of the College: Collective Bargaining Fiscal Employees Year The Iowa Western Community College District Higher Education Association represents the full-time faculty of the College. The current contract will expire August 31, The terms of the Higher Education Association contract called for a salary and benefit increase of 3.74%. A-2

33 The Operating Engineers International Union represents operating engineers of the College. The current contract expires June 30, The terms of the contract called for a salary and benefit increase of 3.46%. Pensions The College is a participating employer in two employee retirement plans, Iowa Public Employees Retirement System (IPERS) and TIAA-CREF. All full-time employees of the Issuer are required to participate in IPERS or TIAAA-CREF. TIAA-CREF is a nationwide retirement and financial services system for people who work at colleges, universities, independent schools and other nonprofit education and research institutions throughout the United States. A nonprofit organization, TIAA-CREF is really two companies working together as one. TIAA is a Teachers Insurance and Annuity Association, an insurance company founded in 1918 by the Carnegie Foundation for the Advance of Teaching. CREF is the College Retirement Equities Fund, first set up in 1952 and now registered with the SEC as an open-end, diversified management company under the federal Investment Company Act of All permanent employees of the College are eligible for and must participate in one of either IPERS or TIAA-CREF. IPERS, is a state-wide multiple-employer cost-sharing defined benefit pension plan administered by the State of Iowa. IPERS provides retirement and death benefits which are established by State statute to plan members and beneficiaries. Employees who retire at age 65 (or anytime after age 58 with 30 or more years of service) are entitled to full monthly benefits. IPERS offers five options for distribution of retirement benefits. Benefits become fully vested after completing four years of service or after attaining age 55. IPERS plan members are required to contribute a percentage of their annual salary. The Issuer is also required to make annual contributions to IPERS equal to amounts required by State statute. The Issuer's share is payable from the Issuer's General Fund and the Issuer is authorized to levy a tax sufficient to meet its obligations, if necessary. All contributions are on a current basis. See "APPENDIX D AUDITED FINANCIAL STATEMENTS" for additional information on IPERS. The following table sets forth the statutorily required contributions made by the Issuer to IPERS and TIAA- CREF for Fiscal Years 2008 through, and including, The Issuer has always made their full statutorily required contributions to both TIAA-CREF and IPERS. The Issuer cannot predict the levels of funding that will be required in the future. Fiscal Year Amount Contributed to IPERS Amount contributed to TIAA-CREF % of Covered Payroll paid by Issuer % paid by Employee , , , , , , , , , , , , Source: Iowa Western Community College Independent Auditor's Reports for Fiscal Year Ending June 30, The fund is administered by the State with administration costs paid from income derived from invested funds. IPERS has an unfunded actuarial liability and unrecognized actuarial loss. The following table sets forth certain information about the funding status of IPERS that has been extracted from the comprehensive annual financial report of IPERS for fiscal year 2013 (the "IPERS CAFR"). A complete copy of the IPERS CAFR can be obtained by visiting IPERS website at: or by writing to IPERS at P.O. Box 9117, Des Moines, Iowa According to IPERS, as of the end of fiscal year 2013, there were approximately 342,652 total members participating in IPERS, including Issuer employees. IPERS does not break out the funding status for each participating entity; therefore, it is not possible to determine the Issuer's allocable share of the funding status of IPERS. A-3

34 Fiscal Year Ended June 30 Unfunded Actuarial Accrued Liability (Actuarial Value) [b]-[a] Funded Ratio (Actuarial Value) [a]/[b] UAAL as a % of Covered Payroll (Actuarial Value) [[b-a]/[c]] Actuarial Value of Assets [a] Actuarial Accrued Liability [b] Covered Payroll [c] ,123,979,941 26,018,593,823 4,894,613, ,438,643, ,537,458,560 26,468,419,650 4,930,961, ,571,182, ,575,309,199 28,257,080,114 5,681,770, ,574,872, ,530,094,461 29,446,197,486 5,916,103, ,786,158, ,711,096,187 30,498,342,320 5,787,246, ,880,131, Source: IPERS Comprehensive Annual Financial Report (Fiscal Year 2013) When calculating the funding status of IPERS for fiscal year 2013, the following assumptions were used: (1) the amortization period for the total unfunded actuarial liability is 30 years (which is consistent with the maximum acceptable amortization period set forth by the Governmental Accounting Standards Board ("GASB") in GASB Statement No. 25); (2) the rate of return on investments is assumed to be 7.5%; (3) salaries are projected to increase % for IPERS, depending on years of service; and (4) the rate of inflation is assumed to be 3.25% for prices and 4.0% for wages. Bond Counsel, the Issuer, and the Financial Advisor undertake no responsibility for and make no representations as to the accuracy or completeness of the information available from the IPERS discussed above or included on the IPERS website, including, but not limited to, updates of such information on the State Auditor's website or links to other Internet sites accessed through the IPERS website. GASB 45 In June 2004, the Governmental Accounting Standards Board ("GASB") issued GASB 45, which address how state and local governments are required to account for and report their costs and obligations related to other post employment benefits ("OPEB"), defined to include post retirement healthcare benefits. GASB 45 Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pension establishes financial reporting standards designed to measure, recognize and display OPEB costs. OPEB costs would become measurable on an accrual basis of accounting, and contribution rates (actuarially determined) would be prescribed for funding such costs. The provisions of GASB 45 do not require governments to fund their OPEBs. The Issuer may establish its OPEB liability at zero as of the beginning of the initial year of implementation; however the unfunded actuarial liability is required to be amortized over future periods. In accordance with the requirements of GASB 45, the Issuer's financial statements must comply with these provisions no later than the fiscal year ending June 30, Consistent with Iowa Code section 509A.13, the Issuer offers post-retirement medical, prescription and dental benefits are available to all fulltime employees of the Issuer who retire before attaining age 65. The group health insurance plan provided to full time Issuer employees allows retirees to continue medical coverage until they reach age 65. Although retirees pay 100% of the "cost of coverage", the pre-age 65 group of retirees is grouped with the active employees when determining the cost of coverage. The computation creates an implicit rate subsidy that would not exist if the cost of the coverage for this group (pre-age 65 retirees) was computed separately and paid 100% by that group. In addition, the College has previously provided a Voluntary Early Retirement Program. This program provides cash benefits payable in three installments during the following fiscal year, as well as health insurance coverage up to a specified amount until the staff member reaches the age of 65. This explicit benefit is included in this valuation reflected below. There was most recently 372 eligible active employees that may choose this option upon retirement, and 32 retired employees for which this benefit is already being utilized. This retirement option is not available as a choice for future retirees at this time, although the College annually determines whether to offer the Voluntary Early Retirement Program. The College's annual OPEB cost is calculated based on the annual required contribution (ARC) of the Community College, an amount actuarially determined in accordance with GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years. A-4

35 The following table shows the components of the College's annual OPEB cost for the year ended June 30, 2013, the amount actually contributed to the plan and changes in the College's net OPEB obligation: Annual required contribution $33,211 Interest on net OPEB obligation 5,590 Adjustment to annual required contribution (11,508) Annual OPEB costs 27,293 Contributions made 0 Increase in net OPEB obligation 27,293 Net OPEB obligation beginning of year 124,223 Net OPEB obligation end of year $151,516 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, 2013, the College contributed $-0- to the medical plan. The College's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation are summarized as follows: Year ended Annual OPEB Cost % of Annual OPEB cost contributed Net OPEB Obligation June 30, 2009 $38, % $31,919 June 30, , ,637 June 30, , ,930 June 30, , ,223 June 30, , ,516 Funded Status and Funding Progress As of July 1, 2010, the most recent actuarial valuation date for the period July 1, 2012 through June 30, 2013, the actuarial accrued liability was $201,128, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $201,128. The covered payroll (annual payroll of active employees covered by the plan) was approximately $15,774,000 and the ratio of the UAAL to covered payroll was 1.3%. As of June 30, 2013, there were no trust fund assets. Population Presented below are the current populations of the thirteen counties that the college primarily serves, as provided by the 2010 CENSUS: County Population County Population Adair 7,682 Mills 15,059 Adams 4,029 Monona 9,243 Audubon 6,119 Montgomery 10,740 Cass 13,956 Page 15,932 Crawford 17,096 Pottawattamie 93,158 Fremont 7,441 Shelby 12,167 Harrison 14,928 A-5

36 Labor Force Data Presented below are the unemployment rates for each County within the Agency, the State of Iowa and the National unemployment average, for August 2014, as provide by the Iowa Workforce Development: Retail Sales County Unemployment % County Unemployment % Adair 3.10 Mills 3.80 Adams 3.70 Monona 4.80 Audubon 4.00 Montgomery 4.00 Cass 3.60 Page 4.30 Crawford 3.30 Pottawattamie 4.00 Fremont 3.80 Shelby 2.50 Harrison 3.50 National Average 6.10 State Average 4.50 Presented below is a listing of retail sales by county for twelve counties that the College primarily serves, for the year ended June 30, 2013: Major Employers in the Merged Area County Number of Businesses Taxable Retail Sales Adair 301 $56,783,841 Adams ,124,547 Audubon ,076,486 Cass ,968,924 Crawford ,243,042 Fremont ,288,952 Harrison ,942,509 Mills ,487,444 Monona ,216,479 Montgomery ,544,403 Page ,281,352 Pottawattamie ,094,395,226 Shelby ,845,848 Presented below are the 25 largest employers in the Merged Area Name Business Number of Employees Alegent Health/Mercy Hospital Health Care American Games Manufacturing Ameristar Casino Gaming/resort Bass Pro Shops Retail Bethany Lutheran Home Nursing Home ConAgra Frozen Foods Food processor Council Bluffs CSD Education Dillards Department Store Griffin Pipe Products Co Cast Iron Pipe Harrah's Casino Hotel Gaming/hotel Horseshoe Casino Gaming Hy-Vee Stores Grocery store Iowa Western Community College Education Jennie Edmundson Health care A-6

37 Kohl's Department Store Menards Retail store Mid America Center Convention center Mid-American Energy Co. Electric and natural gas utility No Frills Supermarket Grocery store Omaha Standard Truck bodies Park Place Health services Peerless Wiping Cloth Wholesale Physicians Clinic Medical Clinic Pinncale Customer Solutions Telemarketing Plumrose USA Manufacturing Risen Son Christian Village Nursing Home Sam's Club Wholesale Sapp Brothers Truckstop Super Saver Stores Grocery Store Target Retail store Tyson-Cooked meats Food processing Union Pacific Railroad Transportation Wal-Mart Retail/grocery store Warren Distribution Manufacturing Source: Iowa Manufacturer's Directory Property Tax Assessment In compliance with section of the Code of Iowa, as amended, the State Director of Revenue annually directs all county auditors to apply prescribed statutory percentages to the assessments of certain categories of real property. The final values, called Actual Valuation, are then adjusted by the County Auditor. Assessed or Taxable Valuation 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 residential and commercial valuations are as follows: Fiscal Year Residential Rollback Ag. Land & Buildings 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. Presented on the following page are the historic property valuations of the Issuer by class of property: A-7

38 Property Valuations Actual Valuation Valuation as of January Fiscal Year Residential: 7,021,697,416 6,999,525,938 6,963,835,375 7,110,740,781 6,978,352,888 6,842,718,181 Agricultural Land: 5,749,250,273 3,788,848,095 3,799,636,024 2,766,657,954 2,766,274,945 1,603,689,503 Ag Buildings: 247,822, ,719, ,415, ,562, ,265, ,882,918 Commercial: 1,466,480,614 1,464,218,588 1,490,995,032 1,479,084,226 1,445,407,665 1,320,844,062 Industrial: 343,225, ,094, ,664, ,468, ,850, ,900,573 Personal RE: Railroads: 169,912, ,780, ,354, ,743,457 99,735,284 87,535,024 Utilities: 223,513, ,917, ,189, ,706, ,024, ,931,514 Other: 2,541,536 2,620,532 1,436,702 1,436,702 1,436,702 1,436,702 Total Valuation: 15,224,444,687 13,087,725,426 13,050,527,894 12,080,399,738 11,862,348,517 10,428,938,477 Less Military: 19,724,361 20,167,676 20,650,190 21,089,175 21,481,771 21,884,614 Net Valuation: 15,204,720,326 13,067,557,750 13,029,877,704 12,059,310,563 11,840,866,746 10,407,053,863 TIF Valuation: 449,132, ,460, ,353, ,934, ,567, ,618,956 Utility Replacement: 1,294,059,098 1,422,744,710 1,284,977,917 1,270,127,681 1,286,563,617 1,213,873,788 Taxable Valuation Valuation as of January Fiscal Year Residential: 3,819,598,320 3,688,121,461 3,509,844,907 3,426,525,346 3,266,017,507 3,092,550,907 Agricultural Land: 2,494,471,791 2,269,709,003 2,185,223,084 1,908,815,301 1,833,343,261 1,505,130,201 Ag Buildings: 106,889, ,636, ,635, ,066,836 98,856, ,862,757 Commercial: 1,390,313,277 1,463,972,252 1,488,379,100 1,503,523,578 1,481,478,984 1,357,628,624 Industrial: 325,130, ,094, ,664, ,583, ,068, ,448,166 Personal RE: Railroads: 161,228, ,780, ,354, ,743,457 99,735,284 87,535,024 Utilities: 223,712, ,917, ,189, ,706, ,024, ,931,514 Other: 2,440,505 2,620,532 1,436,702 1,436,702 1,436,702 1,436,702 Total Valuation: 8,523,785,161 8,182,852,549 7,903,727,796 7,512,400,987 7,203,961,879 6,604,523,895 Less Military: 19,724,361 20,167,676 20,602,038 21,009,539 21,413,247 21,687,295 Net Valuation: 8,504,060,800 8,162,684,873 7,883,125,758 7,491,391,448 7,182,548,632 6,582,836,600 TIF Valuation: 369,301, ,299, ,293, ,595, ,065, ,748,470 Utility Replacement: 439,315, ,018, ,083, ,495, ,411, ,370,618 Property Tax Rates Actual % Change in Taxable % Change in Valuation Valuation Actual Valuation Taxable Year w/ Utilities Valuation w/ Utilities Valuation ,947,911, % 9,312,677, % ,891,762, % 8,937,002, % ,673,209, % 8,636,502, % ,703,372, % 8,231,483, % ,587,997, % 7,930,025, % ,066,546, % 7,341,955, % ,088,455, % 6,947,032, % ,935,835, % 6,421,996, % ,472,795, % 6,158,095, % ,668,301, % 5,832,458, % COLLEGE TAX RATES, LEVIES & COLLECTIONS All taxable property within a merged area community college is taxed by each county at a rate not to exceed $ per $1,000 of assessed value on such property for the operation of the area vocational school or the area community college such as the College. In addition to the tax authorized for the operation of a merged area community college, the voters in any merged area may vote a tax not to exceed $ per $1,000 of assessed value for a period not to exceed ten years for capital improvements to the merged area. The board of directors of a merged area may also certify a levy not to exceed $0.03 per $1,000 of assessed value for equipment replacement and they are authorized to levy to pay certain insurance expenses of the merged area. A-8

39 Tax Rates Presented below are the taxes levied by the District for the fund groups as presented, for the period indicated: Year General Unemployment Tort Liability Insurance Early Retirement *Equipment Standby *Plant Fund Debt Service Levy Rate *Voters approved extension of these levies through the fiscal year ending June 30, Property Tax Collection Each county is required by State law to collect all tax levies within its jurisdiction and remit, before the fifteenth of each month, the amount collected through the last day of the preceding month to underlying units of government, including the College. Property tax payments are made at the office of each county treasurer in full or one-half by September 30 or March 31, pursuant to the Code of Iowa, Sections and Where the first half of any property tax has not been paid by October 1, such installment becomes delinquent. If the second installment is not paid, it becomes delinquent on April 1. Delinquent taxes and special assessments are subject to a penalty at the rate of one and one-half percent per month, to a maximum of eighteen percent per annum. If taxes are not paid when due, the property may be offered at the regular tax sale on the third Tuesday of June following the delinquency date. Purchasers at the tax sale must pay an amount equal to the taxes, special assessments, interest and penalties due on the property, and funds so received are applied to the payment of taxes. A property owner may redeem from the regular tax sale, but failing redemption within two years, the tax sale purchaser is entitled to a deed which in general conveys the title free and clear of all liens except future installments of taxes. Tax Collection History Presented below are the taxes levied and collected for the periods indicated: Utility Property Tax Replacement Fiscal Amount Amount Percentage Year Levied Collected Collected 2014 $8,135,995 $8,151, % ,274,463 9,266, % ,160,221 6,465, % ,884,939 6,209, % ,601,480 5,685, % ,251,931 5,384, % Beginning in 1999, the State replaced its previous property tax assessment procedure in valuing the property of entities involved primarily in the production, delivery, service and sale of electricity and natural gas with a replacement tax formula based upon the delivery of energy by these entities. Electric and natural gas utilities now pay replacement taxes to the State in lieu of property taxes. All replacement taxes are allocated among local taxing districts by the State Department of Revenue and Finance and the Department of management. This allocation is made in accordance with a general allocation formula developed by the Department of Management on the basis of general property tax equivalents. Properties of these utilities are exempt from the levy of property tax by political subdivisions. Utility property will continue to be valued by a special method as provided in the statute and taxed at the rate of three cents per one thousand dollars for the general fund of the State. A-9

40 The utility replacement tax statute states that the utility replacement tax collected by the state and allocated among local taxing districts (including the College) shall be treated as property tax when received and shall be disposed of by the county treasurer as taxes on real estate. However, utility property is not subject to the levy of property tax by political subdivisions, only the utility replacement tax and statewide property tax. It is possible that the general obligation debt capacity of the College could be adjudicated to be proportionately reduced in future years if utility property were determined to be other than "taxable property" for purposes of computing the College's debt limit under Article XI of the Constitution of the State of Iowa. There can be no assurance that future legislation will not (i) operate to reduce the amount of debt the College can issue or (ii) adversely affect the College's ability to levy taxes in the future for the payment of the principal of and interest on its outstanding debt obligations, including the Certificates. Approximately 7% of the College's tax base currently is utility property. Notwithstanding the foregoing, the College has the obligation to levy taxes against all the taxable property in the College sufficient to pay principal and interest on the Certificates. Tax Increment Financing The Code of Iowa currently authorizes the use of two types of tax increment financing by local taxing districts in the State of Iowa. The first type allows local government to establish TIF districts to be established for the purposes of financing capital improvements constructed within the defined area which contribute to the urban redevelopment and economic development of the immediate area. The second type of tax increment financing was authorized by state legislative action in the mid-1980's. The area community colleges can establish TIF districts by contract with specific local businesses and industries to provide jobs training programs for new employees if existing expanding businesses or employees of new businesses. The revenues from these job training TIF districts then retires the debt incurred from the issuance of jobs training certificates which finance the costs of jobs training programming over a maximum of ten years. Upon payment of all jobs training certificates the district dissolves and the incremental value from the new or expanded business reverts to the general tax base. The College does not have any TIF district of this type. Legislation- Recent Property Tax Legislation From time to time, legislation proposals are pending in Congress and the Iowa General Assembly that would, if enacted, alter or amend one or more of the tax matters described herein. It cannot be predicted whether or in what forms any of such proposals may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for the levy of taxes by the College, or have an adverse impact on the future tax collections of the College. Purchasers of the Certificates should consult their tax advisors regarding any pending or proposed federal or state tax legislations. The opinion expressed by Bond Counsel is based upon existing legislation as of the date of issuance and delivery of the Certificates and Bond Counsel has expressed no opinion of as of any date subsequent thereto or with respect to any pending federal or state property or tax legislation. During the 2013 legislative session, the Iowa General Assembly enacted Senate File 295 (the "Act"), which the Governor signed into law on June 12, Among other things, the Act (i) reduces the maximum annual taxable value growth percent, due to revaluation of existing residential and agricultural property, from the current 4% to 3%, (ii) assigns a "rollback" (the percentage of a property's value that is subject to tax) to commercial, industrial and railroad property of 95% for the 2013 assessment year and 90% for the 2014 assessment year and all years thereafter, (iii) creates a new property tax classification for multi-residential properties (apartments, nursing homes, assisted living facilities and certain other rental property) that begins in the 2015 assessment year, and assigns a declining rollback percentage to such properties for each subsequent year until the residential rollback percentage is reached in the 2022 assessment year, after which the rollback percentage for such properties will be equal to the residential rollback percentage each assessment year, and (iv) exempts a specified portion of the assessed value of telecommunication properties. The Act includes a standing appropriation to replace some of the tax revenues lost by local governments, including tax increment districts, resulting from the new rollback for commercial and industrial property. Prior to fiscal year 2018, the appropriation is a standing unlimited appropriation, but beginning in fiscal year 2018 the standing appropriation cannot exceed the actual 2017 appropriation amount. The appropriation does not replace losses to local governments resulting from the Act's provisions that reduce the annual revaluation growth limit A-10

41 for residential and agricultural properties to 3% from 4%, the gradual transition for multi-residential properties from the commercial rollback percentage (100% of market value) to the residential rollback percentage (currently 53% of market value), or the reduction in the percentage of telecommunications property that is subject to taxation. Given the wide scope of the statutory changes, and the State's discretion in establishing the annual replacement amount that is appropriated each year commencing in fiscal 2018, the impact of the Act on the Issuer's future property tax collections is uncertain and the Issuer has not attempted to quantify the financial impact of the Act's provisions on the Issuer's future operations. It has been projected by Moody's Investor Service that local governments in Iowa are likely to experience modest reductions in property tax revenues starting in fiscal 2015 as a result of the Act, with sizeable reductions possible starting in fiscal According to Moody's, local governments that may experience disproportionately higher revenue losses include regions that have a substantial commercial base, a large share of multi-residential developments (such as college towns), or significant amounts of telecommunications property. From time to time, other legislative proposals may be considered by the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters descried in this Final Official Statement. It cannot be predicted whether or in what forms any of such proposals may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for the levy of taxes by the College. 1 US Public Finance Weekly Credit Outlook, May 30, 2013, Moody's Investors Service. Funds on Hand The District invests its funds pursuant to Chapter 12B of the Code. No irregularities in the District's investing activities have been noted in District audits. Presented below is a summary of the investments of the College as of September 30, Debt Limit Type of Investment Amount Invested Local Bank Money Market $24,634,808 Local Bank Time CD's 2,000,000 ISJIT Money Market 1,110,587 ISJIT Time CD's 0 ISJIT Economic Development 109,591 COLLEGE INDEBTEDNESS The amount of general obligation debt a political subdivision of the State of Iowa can incur is controlled by the constitutional debt limit, which is an amount equal to 5% of the actual value of property within the corporate limits, taken from the last County Tax list. The District's debt limit, based upon said valuation, amounts to the following: 1/1/2013 Actual Valuation: 16,947,911,759 X 5.00% Statutory Debt Limit: 847,395,588 A-11

42 Makeup of Obligations Subject to Debt Limit Presented below is a summary of the outstanding debt of the College by type of issue: Direct Debt New Job Training Certificates Total General Obligation Bonds: 41,915,000 Total Capital Loan Notes: 2,105,000 Dorm Revenue Bonds: 40,900,000 Energy Management Notes: 0 Total NJTP: 5,600,000 Total Debt Subject to Limit: 90,525,000 Percentage of Debt Limit Obligated: 10.68% Presented below is the principal and interest on the College's New Job Training Certificates, of which 9 different series are currently outstanding, including the Certificates: Year 1-Dec-12 1-Jan-12 1-Jun-11 1-Jun Jun-14 Total Interest Total P&I , , , , , , , , , , , , , , , , , , , , , ,000 96, , , , , , , ,000 79, , , , , ,000 95, ,000 62, , , , , ,000 70, ,000 43, , , , ,000 65, ,000 26, , ,000 70, ,000 9, , ,000 70,000 4,495 74, ,000 75,000 2,325 77,325 Source: Piper Jaffray & Co. Totals: 1,370,000 1,140, , ,000 1,375,000 5,600, ,084 6,156,084 Direct Debt Capital Loan Notes Presented below is the principal, by issue and combined interest on the College's equipment capital loan notes: Fiscal Year 5-Mar-12 Interest Total P&I ,040,000 42,100 1,082, ,065,000 21,300 1,086,300 Totals: 2,105,000 63,400 2,168,400 A-12

43 Direct Debt General Obligation Bonds Presented below is the principal by issue, and the combined interest on the College's outstanding voted, general obligation bond debt: Fiscal Estimated Year 5-Mar Feb-11 1-May-10 1-Jul-08 3-Jun May-14 5-Jan-15 Total Interest Total , , , , , ,000 2,965,000 1,024,249 3,989, , , , , , , ,000 3,130,000 1,064,608 4,194, , , , , , , ,000 3,215, ,771 4,181, , , , , , , ,000 3,305, ,271 4,200, , , , , , , ,000 3,390, ,618 4,208, , , , , , , ,000 3,500, ,211 4,236, , , , , , ,000 2,850, ,659 3,497, , , , ,000 1,635, ,859 2,212, , , , ,000 1,680, ,591 2,215, , , , ,000 1,725, ,953 2,215, , , , ,000 1,785, ,558 2,228, , , , ,000 1,835, ,413 2,227, , , , ,000 1,880, ,491 2,217, , , , ,000 1,940, ,308 2,218, , , ,000 1,270, ,568 1,485, , , ,000 1,305, ,211 1,486, , , ,000 1,350, ,221 1,493, , , ,000 1,390, ,896 1,492, , , ,000 1,435,000 59,730 1,494, , ,000 13, ,530 Totals: 3,695,000 4,450,000 3,975,000 7,750,000 9,550,000 9,995,000 2,500,000 41,915,000 9,925,715 51,840,715 Source: Piper Jaffray & Co. Direct Debt Dorm Revenue Bonds Presented below is the principal and interest on the College's Outstanding Dormitory Revenue Bonds: Taxable BAB Fiscal Series A Series B Series B Series A Series B Series A Interest Less BAB Year 15-Mar Mar-12 1-Jun-05 1-Feb-09** 1-Oct-09 1-Oct-10 Total Reimbursement* Total P&I , , ,000 55, , ,000 1,825,000 1,388,215 3,213, , ,000 55, , ,000 1,700,000 1,344,051 3,044, , ,000 60, , ,000 1,750,000 1,305,404 3,055, , ,000 65, , ,000 1,800,000 1,263,454 3,063, , ,000 65, , ,000 1,850,000 1,216,278 3,066, , ,000 70, , ,000 1,910,000 1,166,472 3,076, , ,000 75, , ,000 1,965,000 1,111,074 3,076, , ,000 80, , ,000 2,035,000 1,051,101 3,086, , ,000 85, , ,000 2,115, ,007 3,101, , ,000 2,155,000 7,425, ,000 11,405, ,308 12,320, , , ,000 1,880, ,013 2,331, , , ,000 1,945, ,258 2,331, , , ,000 2,020, ,678 2,337, , ,000 1,010,000 2,085, ,388 2,329, , ,000 1,050,000 2,160, ,254 2,327, , ,000 1,100,000 2,250,000 86,025 2,336,025 Totals: 6,215,000 8,960, ,000 2,765,000 9,290,000 13,305,000 40,695,000 13,399,979 54,094,979 Source: Piper Jaffray & Co. * Assumes such amount is appropriated and paid by the U.S. Government **To be Refunded A-13

44 Some of the Largest Taxpayers Set forth in the following table are the persons or entities which represent the 2013 largest taxpayers within the Counties that have a majority of their land in the College, as provided by the Auditors Offices of each of said counties. 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 College. The College's tax levy is uniformly applicable to all of the properties included in the table, and thus taxes expected to be received by the College 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 tax levies of the other taxing entities which overlap the properties: Adair County Taxpayer 2013 Taxable Valuation Adams County Taxpayer 2013 Taxable Valuation Mid American Energy $14,394,259 Erickson, J & J Trust $421,165 Nishna Valley Ag Enterprises 1,760,734 Farm Power Inc 401,580 Irlmeter, John and Jodi 890,074 Chupp, Donald & Mabel 11,991 Stephensen, Max and Martha 753,663 Griswold Coop Telephone 5,141 Solo, David 697,373 Southwest Iowa Rural Electric Coop 2,564 Brown, Nancy 624,383 Morris, Ben and Joann 573,277 Stephensen, Lynn & Becky 548,504 Anderson, Larue Trustee 514,705 Wedemeyer, Larry and Arlene 467,251 Audubon County Taxpayer 2013 Taxable Valuation Cass County Taxpayer 2013 Taxable Valuation Mid American Energy $311,071 Mid American Energy- Tax Department $38,612,160 Centurylink 258,685 Mid American Energy Company 21,898,329 Central Iowa Power Coop 188,155 Lincoln Electric System 14,566,563 Marn-Elk Horn Tele Co 187,104 Interstate Power and Light Co 10,748,889 Northern Natural Gas Co 121,271 Northern Natural Gas Co 9,318,672 Nishnabotna Valley Rec 80,630 Wal-Mart Real State Investment Co 8,969,970 Atlantic Munic Utility 53,393 Central Iowa Power Coop 8,953,899 Guthrie County Rec 43,109 E & F Farm Corp 8,665,720 Zayo Group LLC 42,695 Municipal Energy Agency of Nebraska 6,467,681 West Iowa Telephone 24,197 Oneok North System 5,953,983 Crawford County Taxpayer 2013 Taxable Valuation Fremont County Taxpayer 2013 Taxable Valuation Union Pacific Corp 1,208,037 Mid American Energy $19,132,519 Grote, Dennis & Marilyn 677,714 Burlington Northern Railroad 18,344,650 Dunham Farms LLC 594,956 Trigen LLC 6,228,940 Meeves, Paul and Betty 494,485 Rollin Hills Farm LLC 5,666,090 Grote, Dennis 477,577 Payne Valley Farms Limited Liability Co 5,307,860 Chicago Central and Pacific RR 443,460 B P D Farms LLC 5,057,610 Buresh, Robert & Shelly 383,744 Eaton Yale & Towne Inc 5,024,680 Roberts, Scott 372,802 Longinaker, C W Corp 4,849,900 Sullivan, John and DeDe 342,994 Qwest Corp 4,719,362 Iowa Telecom 293,677 Manildra Energy Corporation 4,633,840 Harrison County Taxpayer 2013 Taxable Valuation Mills County Taxpayer 2013 Taxable Valuation Union Pacific 35,691,464 Mid American Energy $24,716,756 Mid American Energy 12,859,892 Burlington Northern & Santa Fe 24,133,326 Iowa Telecom 7,867,394 Natural Gas Pipeline Co 20,573,307 Chicago Central & Pacific 6,012,252 Northern Natural Gas Co 14,041,543 Qwest 4,818,056 Qwest Corp 11,637,547 Burlington Northern 3,987,147 Oneok North System LLC 5,475,544 Woodbine Manufacturing 3,424,930 Agrivision Group Properties LLC 4,488,943 Larry S Buss 3,138,245 Hughes, James & Monica 3,968,704 Mo Management 2,747,627 Iowa Waster Systems Inc 2,843,379 Thein Farm Management, Inc 2,500,377 Bunge Corporation 2,643,377 Monona County Taxpayer 2013 Taxable Valuation Montgomery County Taxpayer 2013 Taxable Valuation Bolton, Leonard $658,188 Mid American Energy $2,767,886 Brummer, Robert 590,913 Oster, Edward L 2,567,240 Gorham, Kenneth & Gorham 430,949 Adams, Vernita Etal 1,742,730 A-14

45 Gorham, Gary & Audrey 428,720 Bates, Jerry D Trust 1,628,880 Melby, Randy 837,938 Bates, Particia, J.D. IRR TR 1,604,300 Smith, Mary Lou Irrevoc Trust 403,329 Woodfield Investments 1,444,660 Gorham, Ralph 364,157 Karwal Farms Inc 1,418,560 Mccord, Mojorie Revoc Trust 340,638 Natural Gas Piepline of America 1,388,568 Smith, Paul & Janey 334,067 Passow, Harold E 1,277,230 Gorham, Chadwick 307,106 Young, Jon K 1,265,150 Page County Taxpayer 2013 Taxable Valuation Pottawattamie County Taxpayer 2013 Taxable Valuation Mid American Energy-Trans $14,692,297 Mid American Electric 289,246,442 NSK Corp 11,710,410 H B R Realty 84,161,041 Mid American Energy-elec 9,027,227 Ameristar Casino 58,425,000 Burlington Northern 6,933,128 Harveys Iowa Management 51,383,600 Wal-Mart Real Estate Bus Trust 6,469,560 Menard Inc 37,525,000 FG & A LLC 3,978,920 Northern Natural Gas Pipeline 37,008,811 Iowa Telecom 3,667,234 Kimco Metro Crossing LP 32,519,857 Century Link 3,456,008 City of Council Bluffs 24,990,802 Anderson, James 2,978,510 Qwest 24,930,223 Boylan Farms Inc 2,934,720 Tetra LLC 20,860,431 Shelby County 2013 Taxable Valuation Combined 2013 Taxable Valuation Burlington Northern Railroad 13,225,631 Mid American Electric 289,246,442 Mid American Energy 9,947,840 Mid American Energy 106,028,552 Kirkman Farms, LLP 9,677,719 H B R Realty 84,161,041 Nishnabotna Valley Rec 7,939,373 Burlington Northern Railroad 66,623,882 Monogram Prepared Meats, LLC 6,337,518 Northern Natural Gas Co 60,490,297 Peters, D F Farms, LLC 4,017,595 Ameristar Casino 58,425,000 Productive Farms, LLC 3,932,505 Harveys Iowa Management 51,383,600 Harlan Municipal Utilities 3,733,899 Qwest 46,105,188 Handlos, Lawerence F & Doris 3,720,365 Mid American Energy- Tax Department 38,612,160 NW Iowa Power Coop 3,485,918 Menard Inc 37,525,000 Source: Piper Jaffray & Co. Overlapping & Underlying Obligations Presented below is a listing of the overlapping and underlying obligations secured by ad-valorem property taxes outstanding of issuers who are wholly or partially within the boundaries of the Issuer. Outstanding 2013 Taxable Taxable Value Percentage Amount Taxing Authority Debt (2) Valuation Within Issuer Applicable Applicable Anita 155,132 23,674,924 23,674, % 155,132 Arion 0 1,647,246 1,647, % 0 Aspinwall 0 4,974,844 4,974, % 0 Atlantic 10,015, ,360, ,360, % 10,015,000 Avoca 170,112 55,906,315 55,906, % 170,112 Blanchard 0 406, , % 0 Braddyville 0 2,902,327 2,902, % 0 Carson 1,387,093 21,657,859 21,657, % 1,387,093 Carter Lake 3,700, ,860, ,860, % 3,700,000 Clarinda 3,545, ,215, ,215, % 3,545,000 Coin 27,000 2,502,455 2,502, % 27,000 College Springs 0 2,313,264 2,313, % 0 Council Bluffs 47,435,000 2,577,593,835 2,577,593, % 47,435,000 Crescent 0 22,787,997 22,787, % 0 Cumberland 0 3,756,408 3,756, % 0 Defiance 0 5,844,410 5,844, % 0 Dow City 36,724 7,363,931 7,363, % 36,724 Dunlap 153,842 25,441,408 25,441, % 153,842 Earling 0 10,710,906 10,710, % 0 Elk Horn 782,000 16,014,494 16,014, % 782,000 Elliott 115,000 4,765,901 4,765, % 115,000 Emerson 0 9,785,208 9,785, % 0 Essex 127,885 14,683,123 14,683, % 127,885 Farragut 345,000 8,778,768 8,778, % 345,000 A-15

46 Glenwood 2,167, ,909, ,909, % 2,167,142 Grant 0 806, , % 0 Griswold 242,761 21,914,242 21,914, % 242,761 Hamburg 598,490 34,437,203 34,437, % 598,490 Hancock 0 6,433,300 6,433, % 0 Harlan 6,010, ,682, ,682, % 6,010,000 Hastings 60,129 2,976,726 2,976, % 60,129 Henderson 55,000 3,024,367 3,024, % 55,000 Hepburn 0 251, , % 0 Imogene 0 853, , % 0 Irwin 0 6,695,438 6,695, % 0 Kimballton 38,308 3,547,519 3,547, % 38,308 Kirkman 0 899, , % 0 Lewis 0 5,784,486 5,784, % 0 Little Sioux 0 2,004,741 2,004, % 0 Logan 1,542,244 35,256,131 35,256, % 1,542,244 Macedonia 6,029 5,176,257 5,176, % 6,029 Magnolia 0 2,648,012 2,648, % 0 Malvern 323,095 27,353,653 27,353, % 323,095 Manilla 0 14,124,435 14,124, % 0 Manning 501,118 39,890,093 39,890, % 501,118 Marne 53,947 2,575,888 2,575, % 53,947 Massena 0 6,213,042 6,213, % 0 McClelland 0 4,423,190 4,423, % 0 Minden 158,000 15,747,686 15,747, % 158,000 Missouri Valley 4,800,000 71,631,487 71,631, % 4,800,000 Modale 85,872 6,584,275 6,584, % 85,872 Mondamin 312,450 8,188,459 8,188, % 312,450 Moorhead 0 2,958,689 2,958, % 0 Neola 1,184,987 28,145,466 28,145, % 1,184,987 Northboro 0 539, , % 0 Oakland 3,209,201 51,638,171 51,638, % 3,209,201 Pacific Junction 45,000 10,350,941 10,350, % 45,000 Panama 0 7,080,282 7,080, % 0 Persia 39,298 5,476,085 5,476, % 39,298 Pisgah 64,205 3,976,665 3,976, % 64,205 Portsmouth 0 6,818,010 6,818, % 0 Randolph 35,493 3,401,862 3,401, % 35,493 Riverton 18,000 3,943,215 3,943, % 18,000 Shambaugh 0 2,602,324 2,602, % 0 Shelby 0 68,419,278 68,419, % 0 Shenandoah 6,099, ,841, ,841, % 6,099,340 Sidney 650,000 21,872,089 21,872, % 650,000 Silver City 0 6,400,053 6,400, % 0 Tabor 0 21,913,686 21,913, % 0 Tennant 0 1,584,526 1,584, % 0 Thurman 0 2,724,811 2,724, % 0 Treynor 350,689 32,510,663 32,510, % 350,689 Underwood 402,452 35,305,333 35,305, % 402,452 Walnut 1,060,000 22,469,491 22,469, % 1,060,000 Westphalia 0 2,457,303 2,457, % 0 Wiota 49,945 2,280,934 2,280, % 49,945 Woodbine 1,790,000 40,802,157 40,802, % 1,790,000 Yorktown 0 935, , % 0 AHST CSD 4,235, ,487, ,487, % 4,235,000 Atlantic CSD 0 428,932, ,932, % 0 Boyer Valley CSD 3,252, ,183, ,183, % 3,252,000 CAM CSD (former Anita and C and M) 0 294,427, ,427, % 0 Clarinda CSD 0 266,265, ,265, % 0 Council Bluffs CSD 2,500,000 2,131,804,687 2,131,804, % 2,500,000 East Mills CSD 1,975, ,720, ,720, % 1,975,000 Exira-Elk Horn-Kimballton CSD 740, ,207, ,207, % 740,000 Essex CSD 0 83,303,004 83,303, % 0 Farragut CSD 0 122,088, ,088, % 0 Fremont-Mills CSD 3,005, ,609, ,609, % 3,005,000 Glenwood CSD 17,375, ,649, ,649, % 17,375,000 Griswold CSD 0 243,950, ,950, % 0 Hamburg CSD 0 127,177, ,177, % 0 Harlan CSD 6,010, ,918, ,918, % 6,010,000 A-16

47 IKM-Manning CSD 1,985, ,060, ,060, % 1,985,000 Lewis Central CSD 9,055,000 1,100,821,651 1,100,821, % 9,055,000 Logan-Magnolia CSD 1,715, ,001, ,001, % 1,715,000 Missouri Valley CSD 0 254,971, ,971, % 0 Riverside CSD 12,075, ,186, ,186, % 12,075,000 Shenandoah CSD 4,145, ,632, ,632, % 4,145,000 Sidney CSD 960, ,728, ,728, % 960,000 South Page CSD 0 92,634,090 92,634, % 0 Treynor CSD 6,150, ,231, ,231, % 6,150,000 Tri-Center CSD 410, ,387, ,387, % 410,000 Underwood CSD 4,245, ,261, ,261, % 4,245,000 Walnut CSD 340, ,205, ,205, % 340,000 West Harrison CSD 0 222,732, ,732, % 0 Woodbine CSD 1,990, ,153, ,153, % 1,990,000 Adair County 2,762, ,807, ,807, % 2,762,000 Adams County 0 303,233, ,233, % 0 Audubon County 0 370,021, ,021, % 0 Cass County 618, ,184, ,184, % 618,000 Crawford County 1,510, ,303, ,303, % 1,510,000 Fremont County 655, ,342, ,342, % 655,000 Harrison County 225, ,957, ,957, % 225,000 Mills County 720, ,057, ,057, % 720,000 Monona County 92, ,619, ,619, % 92,852 Montgomery County 5,282, ,662, ,662, % 5,282,664 Page County 910, ,174, ,174, % 910,000 Pottawattamie County 15,835,000 4,667,320,274 4,667,320, % 15,835,000 Shelby County 0 798,320, ,320, % 0 Green Hills AEA 0 12,240,429,529 9,312,677, % 0 (1) Source: Piper Jaffray & Co. - Calls with issuers, Offical Audits, EMMA, Iowa Overlapping Debt Table 210,720,499 FINANCIAL SUMMARY Actual Value of Property, 2013: $16,947,911,759 Taxable Value of Property, 2013: 9,312,677,792 Direct General Obligation Debt: $49,625,000 Less Self-Supported General Obligation Debt: -7,705,000 Net Direct General Obligation Debt: $41,920,000 Overlapping Debt: 201,705,085 Net Direct & Overlapping General Obligation Debt: $243,625,085 Population, 2010 US Census: 176,650 Direct Debt per Capita: $ Total Net Debt per Capita: $1, Net Direct Debt to Taxable Valuation: 0.45% Total Debt to Taxable Valuation: 2.62% Net Direct Debt to Actual Valuation: 0.25% Total Debt to Actual Valuation: 1.44% Actual Valuation per Capita: $95, Taxable Valuation per Capita: $52,718 A-17

48 APPENDIX B THE BONDS CONSTITUTE A VALID AND BINDING SPECIAL OBLIGATION OF THE COLLEGE PAYABLE SOLELY FROM THE SOURCES PROVIDED IN THE RESOLUTION, AND DESCRIBED HEREIN. THE BONDS WILL BE SECURED BY A VALID FIRST LIEN ON THE FUTURE NET REVENUES OF THE IOWA WESTERN COMMUNITY COLLEGE HOUSING SYSTEM FOR STUDENTS (THE "DORMITORY SYSTEM"), INCLUDING OTHER INCIDENTAL FACILITIES PLEDGED BY THE RESOLUTION ADOPTED BY THE BOARD OF DIRECTORS. THE BONDS ARE FURTHER SECURED BY A MORTGAGE ON THE REAL PROPERTY THAT CONSTITUTES THE DORMITORY SYSTEM AND THE MONEY HELD PURSUANT TO THE FUNDS AND ACCOUNTS. THE BONDS REPRESENT NO DIRECT TAX LIEN ON THE COLLEGE, AND UNDER NO CIRCUMSTANCES SHALL THE BONDHOLDERS BE ENTITLED TO OBTAIN A DEFICIENCY JUDGMENT AGAINST THE COLLEGE. As described above and in the Official Statement, the Bonds are not a general obligation of the College, and are not payable in any manner by taxation nor from any general revenues of the College; but instead are payable solely from the sources described in the Resolution, and the College shall not be liable by reason of the failure of the Net Revenues to be sufficient for the payment of the Bonds. Because the financial statements of the Dormitory System are not presented separately by the College, the College's complete audited financial statements are included as Appendix B. As noted above and in the body of this Official Statement, however, the Bonds are payable solely from the Net Revenues of the Dormitory System and not from any other funds of the College. IOWA WESTERN COMMUNITY COLLEGE (MERGED AREA XII) COUNCIL BLUFFS, IOWA THE AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2014 B-1

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