FINAL OFFICIAL STATEMENT DATED JUNE 28, 2011

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1 New Issue Not Rated FINAL OFFICIAL STATEMENT DATED JUNE 28, 2011 In the opinion of Dorsey & Whitney LLP, Bond Counsel, according to present laws, rulings and decisions and assuming compliance with certain covenants; the interest on the Bonds will be excluded from gross income for federal income tax purposes, and such interest will not be an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations under the Internal Revenue Code and will be taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), and the City will designate the Bonds as qualified tax exempt obligations. See TAX EXEMPTION herein. $1,100,000 CITY OF LANSING Allamakee County, Iowa General Obligation Corporate Purpose and Refunding Bonds, Series 2011 Dated Date of Delivery Book-Entry Bank Qualified Due Serially June 1, The (the Bonds ) are being issued by the (the City ). 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 on June 1 in the following years and amounts. AMOUNTS, MATURITIES, INTEREST RATES AND YIELDS $135, % Term Note due June 1, 2013; Yield 0.700%; CUSIP Number BG1 140, % Term Note due June 1, 2015; Yield 1.250%; CUSIP Number BJ5 145, % Term Note due June 1, 2017; Yield 1.850%; CUSIP Number BL0 155, % Term Note due June 1, 2019; Yield 2.400%; CUSIP Number BN6 165, % Term Note due June 1, 2021; Yield 3.000%; CUSIP Number BQ9 175, % Term Note due June 1, 2023; Yield 3.500%; CUSIP Number BS5 185, % Term Note due June 1, 2025; Yield 4.000%; CUSIP Number BU0 For further details see MANDATORY REDEMPTIONS herein. OPTIONAL REDEMPTION Bonds due June 1, , inclusive, are non-callable. Bonds due June 1, , inclusive, are callable in whole or in part on any date on or after June 1, 2020, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in any order of maturity as determined by the City and within any maturity by lot. See OPTIONAL REDEMPTION herein. PURPOSE, LEGALITY AND SECURITY Bond proceeds will be used to: (i) finance various capital improvements in the City; (ii) currently refund a portion of the City s outstanding General Obligation Corporate Purpose Notes, Series 2002; and (iii) pay the costs of issuance of the Bonds. See THE PLAN OF FINANCING herein. In the opinion of Bond Counsel, Dorsey & Whitney LLP, Des Moines, Iowa, the Bonds will constitute valid and legally binding obligations of the City payable both as to principal and interest from ad valorem taxes levied against all taxable property therein without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. The City intends to designate the Bonds as qualified tax-exempt obligations pursuant to the small issuer exception provided by Section 265(b)(3) of the Internal Revenue Code of The Bonds are offered when, as and if issued and received by the Underwriter, subject to the approving legal opinion of Dorsey & Whitney LLP, Des Moines, Iowa, Bond Counsel, and certain other conditions. It is expected that the Bonds will be made available for delivery on or about July 20, Established 1954 Speer Financial, Inc. INDEPENDENT PUBLIC FINANCE CONSULTANTS ONE NORTH LASALLE STREET, SUITE 4100 CHICAGO, ILLINOIS Telephone: (312) ; Facsimile: (312) COMMERCIAL STREET, SUITE 608 WATERLOO, IOWA Telephone: (319) ; Facsimile: (319)

2 For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission, this document, as the same may be supplemented or corrected by the City from time to time (collectively, the Official Statement ), may be treated as an Official Statement with respect to the Bonds described herein that is deemed near final as of the date hereof (or the date of any such supplement or correction) by the City. The Official Statement, when further supplemented by an addendum or addenda specifying the maturity dates, principal amounts and interest rates of the Bonds, together with any other information required by law or deemed appropriate by the City, shall constitute a Final Official Statement of the City with respect to the Bonds, as that term is defined in Rule 15c2-12. Any such addendum shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference. No dealer, broker, salesman or other person has been authorized by the City to give any information or to make any representations with respect to the Bonds other than as contained in the 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 City. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the City and, while believed to be reliable, is not guaranteed as to completeness. THE INFORMATION AND EXPRESSIONS OF OPINION IN THE OFFICIAL STATEMENT AND THE FINAL OFFICIAL STATEMENT ARE SUBJECT TO CHANGE, AND NEITHER THE DELIVERY OF THE 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 CITY 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 Official Statement or the Final Official Statement they will be furnished on request. This 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. 2

3 BOND ISSUE SUMMARY This Bond Issue Summary is expressly qualified by the entire Official Statement, including the Official Terms of Offering and the Official Bid Form, which are provided for the convenience of potential investors and which should be reviewed in their entirety by potential investors. Issuer:. Issue:. Dated Date: Date of delivery (expected to be on or about July 20, 2011). Interest Due: Each June 1 and December 1, commencing December 1, Principal Due: Optional Redemption: Authorization: Security: Investment Rating: Purpose: Tax Exemption: Bank Qualification: Registrar/Paying Agent: Book-Entry Form: Serially each June 1, commencing June 1, 2012 through 2025, as detailed on the front page of this Official Statement. Bonds maturing on or after June 1, 2021, are callable at the option of the City on any date on or after June 1, 2020, at a price of par plus accrued interest. See OPTIONAL REDEMPTION herein. The Bonds are being issued pursuant to authority established in Code of Iowa, Chapter 384, Division III, and all laws amendatory thereof and supplementary thereto, and in conformity with a resolution of the City Council duly passed and approved. The Bonds are valid and legally binding obligations of the City payable both as to principal and interest from ad valorem taxes levied against all taxable property therein without limitation as to rate or amount, all except as limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to the enforcement of creditors rights generally and except that enforcement by equitable and similar remedies, such as mandamus, is subject to the exercise of judicial discretion. The City does not intend to apply for an investment rating on the Bonds. Bond proceeds will be used to: (i) finance various capital improvements in the City; (ii) currently refund a portion of the City s outstanding General Obligation Corporate Purpose Notes, Series 2002; and (iii) pay the costs of issuance of the Bonds. See THE PLAN OF FINANCING herein. Dorsey & Whitney LLP, Des Moines, Iowa, will provide an opinion as to the tax exemption of the Bonds as discussed under TAX EXEMPTION in this Official Statement. Interest on the Bonds is not exempt from present State of Iowa income taxes. The City intends to designate the Bonds as qualified tax-exempt obligations. Bankers Trust Company, of Des Moines, Iowa. The Bonds will be registered in the name of Cede & Co. as nominee for The Depository Trust Company ( DTC ), New York, New York. DTC will act as securities depository of the Bonds. See APPENDIX B herein. Delivery: The Bonds are expected to be delivered on or about July 20, Financial Advisor: Speer Financial, Inc., Waterloo, Iowa and Chicago, Illinois. 3

4 CITY OF LANSING Allamakee County, Iowa Donald Peters Mayor Council Members Jeffrey Bechtel William Burke Rebecca Conway Joe Strobel Deb Volker Officials Carolyn M. Thorsten City Clerk Richard Zahasky City Attorney THE CITY General The (the City ) is located in northeast Iowa along the Mississippi River and has a land area of approximately 1.2 square miles. The City was incorporated as a town in 1864 and a second class city in William Garrison, the first arrival in 1848, laid claim to some 14,000 acres of land in the valley and surrounding countryside. He was later joined the same year by John Haney Sr., his son, James and H.H. Houghton of Galena, Illinois. Haney and Houghton purchased Garrison s land rights and laid out the new community in 1851, naming it after the original proprietor s native city in Michigan. A post office was established in 1849, a year after the new community was settled. From its beginning, the City was a booming one, providing a port of call for the many steamboats, shipping grain, merchandise and passengers on the Mississippi. City Organization and Services The City has a Mayor-Council form of government. Policy is established by a Mayor and five Council members. The Mayor and Council members are elected every two years. The City Clerk and City Attorney are appointed by the City Council. City-operated facilities include the water and sewer systems, a Marina and a park system. The City has seven people employed on a full-time basis. In addition, there are 19 part-time and seasonal employees. The City currently employs two full-time police officers. The City is served by a volunteer Fire Department. Approximately 30 volunteers operate out of a centrally located fire station. The fire insurance classification for the City is Class 7. 4

5 Electric power is supplied to the City by Alliant Energy and Allamakee County REC (Rural Electric Co.). Water service is provided to residents by the City. Sewer lines are maintained by the City with all waste being pumped to a regional treatment facility. Transportation Lansing is served by Iowa Highway 9, which terminates on the Black Hawk Bridge leading to Wisconsin. Education The residents of the City are served by the Eastern Allamakee Community School District, with Lansing Middle School and Kee High School in Lansing and New Albin Elementary located in nearby New Albin, Iowa. Post secondary educational opportunities are readily available. Luther College located in Decorah, Iowa is 29 miles from Lansing. Also, the University of Wisconsin-LaCrosse, Northeast Iowa Community College-Calmar, Western Wisconsin Technical College and Upper Iowa University are all within a 45 mile range. Community Life Lansing is proud of its Lansing Sports Complex. It has a beautiful ball park, tennis court and many other play equipment items in its park. Lansing has become a resort area; many people have their summer homes along the Mississippi River. Mt. Hosmer offers a wonderful picnic spot, with city water and tables. Visitors can drive to the top where they can enjoy beautiful views of the Mississippi River and three states (Iowa, Minnesota, Wisconsin). Lansing Fish days are celebrated every second weekend in August with a parade. Lansing is a river town, right on the main channel of the Mississippi River, and consequently has a resort-like feel from the seasonal recreational boaters. SOCIOECONOMIC INFORMATION The following demographic information is for the City. Additional comparisons are made with Allamakee County (the County ) and the State of Iowa (the State ). Population The following table reflects population trends for the City, the County and the State of Iowa. Population Comparison(1) City Percent The Percent State of Percent Year Population Change County Change Iowa Change ,007 N/A 13,855 N/A 2,776,785 N/A , % 14, % 2,926, % (1.28%) 14,330 (2.35%) 3,046, % Note: (1) Source: U.S. Bureau of the Census. 5

6 Employment Lists of major area employers are shown below. The area list shows the diversity of the employers located within 60 miles of the City. Major Area Employers(1) Approximate Location Name Business or Product Employment(2) Decorah... Acument Global Technologies, Inc.... Industrial Fasteners Decorah... Winneshiek Medical Center... Medical Services Decorah... Rockwell-Collins, Inc..... Aircraft Assembly Decorah... Deco Products Co.... Hardware Manufacturing Decorah... Aase Haugen Homes, Inc.... Long-Term Care Facility Waukon... Veteran s Memorial Hospital... Medical Services Decorah... Bruening Rock Products... Stone Products Decorah... Gemini, Inc.... Sign Manufacturing Lansing... Blumenthal Lansing Company... Plastic Products Marquette... Bituma Corp.... Construction Decorah... Iowa Rotocast Plastics, Inc.... Plastic Products Waukon... Reel-Core, Inc.... Plastic Products Decorah... Elco Construction Products... Fasteners Waukon... Kol-Gol, Inc.... Wire Products Notes (1) Source: Selected telephone surveys and the 2011 Iowa Manufacturers Directory. (2) Includes full and part-time as well as seasonal employees. The following tables show employment by industry and by occupation for the City, the County and the State as reported by the 2000 Census. Employment By Industry(1) The City The County State of Iowa Classification Number Percent Number Percent Number Percent Agriculture, forestry, fishing and hunting, and mining % 1, % 65, % Construction % % 91, % Manufacturing % 1, % 253, % Wholesale trade % % 53, % Retail trade % % 179, % Transportation and warehousing, and utilities % % 73, % Information % % 41, % Finance, insurance, real estate and rental and leasing % % 100, % Professional, scientific, management, administrative, and Waste management services % % 90, % Education, health and social services % 1, % 324, % Arts, entertainment, recreation, accommodation and food services % % 98, % Other services % % 66, % Public administration % % 51, % Total % 7, % 1,489, % Note: (1) Source: U. S. Bureau of the Census. Employment By Occupation(1) The City The County State of Iowa Classification Number Percent Number Percent Number Percent Management, professional, and related occupations % 2, % 466, % Service occupations % % 219, % Sales and office occupations % 1, % 385, % Farming, fishing, and forestry occupations % % 15, % Construction, extraction, and maintenance occupations % % 132, % Production, transportation, and material moving occupations % 1, % 269, % Total % 7, % 1,489, % Note: (1) Source: U.S. Bureau of the Census. 6

7 The following shows the annual average unemployment rates for the County, the State and the United States. Annual average unemployment rates are not available for the City. Annual Average Unemployment Rates(1) Calendar The State United Year County of Iowa States % 3.3% 5.3% % 3.9% 5.6% % 4.4% 6.3% % 4.7% 5.4% % 4.3% 5.1% % 3.8% 4.6% % 3.8% 4.6% % 4.0% 5.8% % 6.0% 9.3% % 6.7% 9.7% 2011(2) % 6.1% 8.8% Notes: (1) Source: Iowa Workforce Development. (2) Through March Allamakee County Non-Agricultural Labor Force By Place of Work(1) Goods Producing... 1,730 1, ,220 1,310 Service Producing... 2,950 2,930 2,720 2,700 2,640 Government... 1,040 1,070 1,090 1,110 1,140 Total... 5,720 5,310 4,730 5,030 5,090 Note: (1) Source: Iowa Workforce Development. Place of Work concept counts an individual in the area where he or she works regardless of where that person lives. The 2000 Census reported that the median value of the City s owner-occupied homes was $70,400, which compares with $68,100 for the County and $82,500 for the State. The 2000 market value of specified owner-occupied units for the City, the County and the State was as follows: Specified Owner-Occupied Units(1) The City The County State of Iowa Value Number Percent Number Percent Number Percent Under $50, % % 135, % $ 50,000 to $ 99, % 1, % 301, % $100,000 to $149, % % 134, % $150,000 to $199, % % 53, % $200,000 to $299, % % 29, % $300,000 to $499, % % 8, % $500,000 to $999, % % 1, % $1,000,000 or more % % % Total % 2, % 665, % Note: (1) Source: U.S. Bureau of the Census. According to the 2000 Census, the City had a median household income of $29,482. This compares to $33,967 for the County and $39,469 for the State. The following table represents the distribution of household incomes for the City, the County and the State at the time of the 2000 Census. 7

8 Household Income(1) The City The County State of Iowa Income Number Percent Number Percent Number Percent Under $10, % % 93, % $ 10,000 to $ 14, % % 77, % $ 15,000 to $ 24, % % 165, % $ 25,000 to $ 34, % 1, % 168, % $ 35,000 to $ 49, % 1, % 218, % $ 50,000 to $ 74, % % 242, % $ 75,000 to $ 99, % % 101, % $100,000 to $149, % % 55, % $150,000 to $199, % % 12, % $200,000 or more % % 14, % Total % 5, % 1,150, % Note: (1) Source: U.S. Bureau of Census. Retail Sales The Department of Revenue of the State of Iowa provides retail sales figures based on sales tax reports for years ending March 31. The Department of Revenue figures provide recent data to confirm trends in retail sales activity in the City. Retail Taxable Sales(1)(2) Year Annual Percent Ending March 31 Taxable Sales Change + (-) $ 9,863,988 N/A ,358, % ,620, % ,772, % ,586,735 (1.72%) ,889, % ,225, % ,556,232 (5.47%) ,790, % ,187, % Growth from 2001 to % Notes: (1) Source: Iowa Department of Revenue. (2) Beginning with Fiscal Year 2009, annual reports will cover the period beginning July 1 and ending June 30. PLAN OF FINANCING Approximately $141,000 in proceeds of the Bonds will be used to currently refund certain outstanding general obligation notes of the City (the Refunded Notes ). The Refunded Notes are described below. General Obligation Corporate Purpose Notes, Series 2002 (Originally dated November 1, 2002) Maturity or Refunded Outstanding Amount Redemption Redemption Maturities Amount Refunded Price Date(1) 6/1/12... $70,000 $70, % 08/10/11 6/1/ ,000 70, % 08/10/11 Note: (1) Subject to Change. 8

9 Approximately $959,000 of the Bond proceeds will be used, along with other funds of the City, to finance certain capital improvements in the City (the Projects ) and pay the costs of issuance of the Bonds. The Projects include street constructions, as well as sewer and water system improvements. DEBT INFORMATION After the issuance of the Bonds and the refunding of the Refunded Notes, the City will have outstanding approximately $1,260,000 principal amount of general obligation bonded indebtedness. The City does not expect to issue any other additional bonded indebtedness in the foreseeable future. The City has a general obligation debt limit equal to 5% of Actual Valuation. For the January 1, 2009 levy year, adjusted Actual (100%) Valuation of $60,828,021 (including tax increment valuation and excluding military exemption valuation) results in a total debt limit of $3,041,401. This limitation less the City s outstanding general obligation bonded indebtedness ($1,260,000) leaves a general obligation debt margin of $1,781,401. General Obligation Debt Summary(1) (Principal Only) Corporate Purpose Notes, Series $ 140,000 Marina Improvement Notes, Series ,000 The Bonds... 1,100,000 Less: the Refunded Notes... (140,000) Total Direct Debt... $1,260,000 Note: (1) Source: the City. General Obligation Bonded Debt(1) (Principal Only) Fiscal Total Less: Cumulative Year Ending Outstanding The The Refunded Total General Principal Retired June 30 Debt Bonds(2) Notes Obligation Debt(2) Amount Percent $ 90,000 $ 70,000 $ (70,000) $ 90,000 $ 90, % ,000 65,000 (70,000) 85, , % ,000 70, , , % ,000 70, , , % ,000 70, , , % ,000 75, , , % ,000 75, , , % , , , % , , , % , , , % , , , % , ,000 1,075, % , ,000 1,165, % , ,000 1,260, % $300,000 $1,100,000 $(140,000) $1,260,000 Notes: (1) Source: the City. (2) Subject to change. 9

10 Detailed Overlapping Bonded Debt(1) (As of June 15, 2011) Outstanding Applicable to City Debt Percent(2) Amount Schools: Eastern Allamakee County Community School District... $ 4,135, % $ 854,705 Northeast Iowa Community College... 4,745, % 235,827 Total Schools... $1,090,532 Others: Allamakee County... $ % $ 0 Total Others... 0 Total School and Others Overlapping Bond Debt... $1,090,532 Notes: (1) Source: the County Auditor s office. (2) Overlapping debt percentages are based on levy year 2009 Taxable Valuation, the most current available and have been rounded. Statement of Bonded Indebtedness(1)(2) City Actual Valuation, January 1, $60,828,021 City Taxable Valuation, January 1, $35,654,543 Per Capita (2010 Total Percentage of Population Principal Actual Taxable of 999) City General Obligation Bonded Debt (Including the Bonds)... $1,260, % 3.53% $1, Total Direct Debt... $1,260, % 3.53% $1, Overlapping Debt Schools... $1,090, % 3.06% $1, Others % 0.00% 0.00 Total General Obligation Bonded Debt and Overlapping Debt... $2,350, % 6.59% $2, Per Capita Actual Value... $60, Per Capita Taxable Value... $35, Notes: (1) Source: the City and the County. (2) As of the date of issuance of the Bonds for Direct Debt and June 15, 2011 for Overlapping Debt. Property Tax Assessment PROPERTY TAX INFORMATION 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. Taxable Valuation subject to tax levy is then determined by the application of State determined rollback percentages, principally to residential 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 Taxable Valuation. Such rollback percentages may be changed in future years. Certain historical rollback percentages for residential valuation are as follows: 10

11 Residential Rollback Percentages for Taxable Valuation(1) Fiscal Year Percentage 2002/ % 2003/ % 2004/ % 2005/ % 2006/ % 2007/ % 2008/ % 2009/ % 2010/ % 2011/ % Note: (1) Source: the City. Property is assessed on a calendar year basis. The assessments finalized as of January 1 of each year are applied to the following tax year. For example, the assessments finalized on January 1, 2009, are used to calculate tax liability for the tax year starting July 1, 2010 through 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 City. Property tax payments are made at the office of each county treasurer in full or one-half by September 30 and March 31, pursuant to the Code of Iowa, Sections and Where the first half of any property tax has not been paid by October 1, such installment becomes delinquent. If the second installment is not paid, it becomes delinquent on April 1. Delinquent taxes 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 Wednesday 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. Actual (100%) Valuations for the City(1) Fiscal Year: 2006/ / / / /11 Property Class Levy Year January 1: Residential... $33,595,690 $34,723,080 $36,124,430 $38,440,460 $45,794,400 Agricultural... 75,300 69,830 72,800 93, ,500 Commercial... 10,007,980 9,606,350 10,876,810 10,983,448 10,646,300 Industrial... 3,670,700 3,670,700 3,022,500 3,022,500 2,520,700 Railroad , , , , ,989 Utilities without Gas and Electric (2) , , , , ,775 Gas and Electric Utilities (2)... 1,236,294 1,225,004 1,152,156 1,171,908 1,345,593 Less: Military Exemption... (179,645) (190,756) (175,940) (172,236) (172,236) Total... $48,811,421 $49,461,191 $53,521,147 $54,112,763 $60,828,021 Percent Change +(-)... n/a 1.33% 8.21% 1.11% 12.41% Notes: (1) Source: Iowa Department of Management. (2) See PROPERTY TAX INFORMATION - Utility Property Tax Replacement herein. 11

12 For the January 1, 2009 levy year, the City s Taxable Valuation was comprised of approximately 75% residential, 18% commercial, 4% industrial, 2% utilities and less than 1% agricultural, railroads, and military exemption. Taxable ( Rollback ) Valuations for the City(1) Fiscal Year: 2006/ / / / /11 Property Class Levy Year January 1: Residential... $15,452,703 $15,819,690 $16,805,366 $17,524,730 $21,481,867 Agricultural... 75,300 69,830 65,594 87,372 69,252 Commercial... 9,923,001 9,606,350 10,847,576 10,983,448 10,646,300 Industrial... 3,670,700 3,670,700 3,022,500 3,022,500 2,520,700 Railroad , , , , ,989 Utilities without Gas and Electric (2) , , , , ,775 Gas and Electric Utilities (2) , , , , ,896 Less: Military Exemption... (179,645) (190,756) (175,940) (172,236) (172,236) Total... $30,156,589 $30,115,277 $31,789,052 $32,584,098 $35,654,543 Percent Change +(-)... n/a (0.14%) 5.56% 2.50% 9.42% Notes: (1) Source: Iowa Department of Management. (2) See PROPERTY TAX INFORMATION - Utility Property Tax Replacement herein. The following shows the trend in the City s tax extensions and collections. Tax Extensions and Collections(1)(2) Levy Collection Amount Amount Percent Year Year Levied Collected(2) Collected $502,021 $492, % , , % , , % , , % (3) , , % Notes: (1) Source: The City. (2) Includes delinquent taxes, penalties, interest payments and taxes on mobile homes. (3) Total Collections through May Principal Taxpayers(1) January 1, 2009 Actual Taxpayer Name Business/Service Valuation(2) Lansing Company, Inc.... Commercial Properties... $1,250,000 Northern Engraving Corporation... Sign Engraving ,300 Kerndt, G & Bros. Inc.... Real Property ,881 Brennan Construction Company Inc.... Construction ,446 Kerndt Bank Services, Inc.... Bank Services ,300 Interstate Power co/alliant... Utility ,785 Individual... Real Property ,700 Individual... Real Property ,478 Triax Communications... Commercial ,100 Lansing Housing Corporation... Real Property ,709 Total... $5,730,699 Ten Largest Taxpayers as Percent of City's 2009 Actual Value ($60,828,021) % Notes: (1) Source: the County. (2) Every effort has been made to seek out and report the largest taxpayers. Levy Limits Normal municipal operations and maintenance costs are generally funded through the corporate property tax levy. Iowa State Code does not allow the municipal general fund to be taxed above $8.10 per thousand dollars of taxable value in any one year. In addition to the General Fund, there are several other tax funds that the City can create and use for specific purposes. 12

13 The property tax rates for the City from levy year 2005 through levy year 2009 are shown below: Property Tax Rates: Levy Years (1)(2) (Per $1,000 Actual Valuation) Fiscal Year: 2006/ / / / /11 Levy Year: The City: General Fund... $ $ $ $ $ Debt Service Pension and Benefits Others Total City Rate... $ $ $ $ $ Others: Allamakee County... $ $ $ $ $ Eastern Allamakee School District Northeast Iowa Community College Other Total Rate Paid by Lansing Residents... $ $ $ $ $ Notes: (1) Source: The Iowa Department of Management. (2) Does not include the tax rate for agriculture. Utility Property Tax Replacement 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. For the tax years following 1999, 2000, and 2001, each county treasurer computed a special utility property tax levy and levied a special utility property tax equal to the shortfall. However, this special tax was subject to a statutory sunset in A task force was established through January 1, 2003 to study the effects of the utility replacement tax legislation on all local taxing districts and to report its findings to the General Assembly. Currently the utility replacement tax statute states that the utility replacement tax collected by the State and allocated among local taxing districts (including the City) 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 City 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 City s debt limit under Article XI of the Constitution of the State of Iowa. With the sunset of the special utility property tax levy to make up for the short fall in the replacement tax revenue for specific taxing districts, and pending any General Assembly action pursuant to the task force report and recommendations, there can be no assurance that future legislation will not (i) operate to reduce the amount of debt the City can issue or (ii) adversely affect the City s ability to levy taxes in the future for the payment of the principal of and interest on its outstanding debt obligations, including the Bonds. Approximately 2% of the City s tax base currently is utility property. Notwithstanding the foregoing, the City has the obligation to levy taxes against all the taxable property in the City sufficient to pay principal of and interest on the Bonds. 13

14 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 governments 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 City currently has no active TIF districts. Investment Policy FINANCIAL INFORMATION Each investment made by the City must be authorized by applicable law and the City's Investment Policy (the Policy ). Only the City Treasurer, and others authorized by resolution of the City may invest City funds. The City Treasurer when investing or depositing public funds is required to exercise care, skill, prudence, and diligence. According to the Policy, the primary goals of investment prudence are based in the following order of priority: Safety. The safety and preservation of principal in the overall portfolio is the foremost investment objective. Liquidity. Maintaining the necessary liquidity to match expected liabilities. Return. Obtaining a reasonable return. Under the Policy, assets of the City may be invested in the following: Interest bearing savings accounts, interest bearing money market accounts and interest bearing checking accounts at any bank having facilities in Allamakee County, Iowa, having federal deposit insurance, subject to the provision of State law; Obligations of the United States government, its agencies and instrumentalities; Certificates of deposit and other evidences of deposit at banks having facilities in Allamakee County, Iowa, having federal deposit insurance, subject to the provisions of State law; Iowa Public Agency Investment Trust (IPAIT); and Open-end management investment companies registered with the federal Securities and Exchange Commission, provided that the average maturity is 90 days or less and the company is rated at least AA or its equivalent by Moody s Investors Services and Standard and Poor s and further subject to the provisions of State law. Assets may not be invested: (1) for trading of securities for speculation or the realization of short-term trading gains, (2) pursuant to a contract providing for the compensation of an agent based upon the performance of the invested assets, and (3) if the third party with custody of public investment transactions records of the City fails to produce requested records when requested by the City within a reasonable time. Where possible, it is the policy of the City to diversify its investment portfolio to eliminate the risks of loss resulting from over-concentration of assets in a specific class of securities, specific maturity or a specific issuer. Not more than 60% of the City s investment portfolio shall be invested at any one institution. The above is a summary of certain provisions of the City s investment policy. A complete copy of such policy is available from the City upon written request. Financial Reports The City s financial statements are completed on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than generally accepted accounting principles. See APPENDIX A for more detail. 14

15 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 A are from the audited financial statements of the City, including the audited financial statements from the Fiscal year ended June 30, 2008 (the 2008 Audit ). The 2008 Audit has been prepared by Dietz, Donald & Company, Elkader, Iowa, (the Auditor ), and approved by formal action of the City Council. The City has not requested the Auditor consent to the use of the Excerpted Financial Information 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 2008 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 City since the date of the 2008 Audit. Questions or inquires relating to financial information of the City since the date of the 2008 Audit should be directed to the City. Summary Financial Information The following tables are summaries and do not purport to be the complete audits, copies of which are available upon request. See APPENDIX A for excerpts of the City s 2008 fiscal year audit. The summary unaudited financial information presented in the table below is based upon annual filings made by the City with the State of Iowa Auditor s office. Copies of the complete unaudited financial information are available from the City upon request. The City expects that its Cash Balance Governmental Activities to be approximately $372,900 for the fiscal year ended June 30, The City approved a balanced budget for the General Fund for fiscal year Statement of Activities and Net Assets Cash Basis Governmental Activities(1) Audited Fiscal Year Ended June PROGRAMS/FUNCTIONS Governmental Activities: Public Safety... $(162,555) Public Works... (72,735) Health and Social Services... (1,515) Culture and Recreation... (23,852) Community and Economic Development... (3,036) General Government... (88,415) Debt Service... (153,659) Total Governmental Activities... $(505,767) GENERAL RECEIPTS: Property and Other City Tax Levied For: General Purposes... $369,360 Debt Service ,168 Local Option Sales Tax... 72,723 Unrestricted Interest on Investments... 9,452 Bond Proceeds... 0 Miscellaneous... 5,936 Sale of Assets... 7,404 Total General Receipts... $620,043 Change in Cash Basis Net Assets Before Transfers... $114,276 Transfers... (48,156) Change in Cash Basis Net Assets... $ 66,120 Cash Basis Net Assets, Beginning Of Year... $266,840 Cash Basis Net Assets, End Of Year... $332,960 CASH BASIS NET ASSETS Restricted Streets... $ 6,555 Debt Service... 5,319 Other Purposes ,568 Unrestricted ,518 Total Cash Basis Net Assets... $332,960 Note: (1) Source: Audited financial statements of the City for the fiscal year ended June 30,

16 General Fund Statement of Cash Receipts, Disbursements and Changes in Cash Balances(1) Un-audited Fiscal Year Audited Fiscal Year Un-Audited Fiscal Year Ended June 30 Ended June 30 Ended June RECEIPTS: Property Taxes... $260,916 $266,178 $264,917 $272,649 $282,717 Licenses and Permits... 6,133 4,095 2,275 3,770 2,595 Use of Money and Property... 84,185 88,084 99,299 96, ,089 Intergovernmental... 16,226 17,631 16,783 21,439 31,884 Charges for Service... 67,751 94,166 87,498 86,808 84,172 Special Assessment Miscellaneous... 63,235 32,186 18,759 34,705 62,919 Total Receipts... $498,621 $502,521 $489,704 $515,877 $566,702 DISBURSEMENTS: Public Safety... $220,401 $113,753 $136,045 $159,721 $106,817 Public Works... 75, ,721 96, ,226 99,725 Health and Social Services , ,009 Culture and Recreation , , , , ,662 Community and Economic Development ,036 3,036 3,036 3,036 General Government... 95,647 76,791 87,833 91,484 91,581 Debt Service ,975 Total Disbursements... $556,194 $520,387 $462,156 $703,105 $511,805 Excess (Deficiency) of Receipts Over (Under) Disbursements... $(57,573) $(17,866) $ 27,548 $(187,228) $ 54,897 Other Financing Sources (Uses): Sale of Capital Assets... $ 0 $ 0 $ 7,404 $ 0 $ 0 Proceeds of Long-Term Debt ,260 0 Operating Transfers (Net)... 10,914 15,921 (40,011) (11,485) 18,844 Total Other Financing Sources (Uses)... $ 10,914 $ 15,921 $ (32,607) $186,775 $ 18,844 Net Change in Cash Balances... $(46,659) $ (1,945) $ (5,059) $ 453 $ 73,741 Beginning Balance... $246,182 $199,523 $197,577 $192,518 $192,255 (3) Ending Balance... $199,523 $197,578 $192,518 $192,065 $265,996 Notes: (1) Source: The City's un-audited financial statements for fiscal years ending June 30, 2006, June 30, 2007, June 30, 2009 and June 30, The City s audited financial statements for fiscal year ending June 30, (2) Local Option Sales Tax receipts are listed as Other Financing Sources in fiscal year ending June 30, and June 30, (3) Restated. See APPENDIX A herein. PENSION AND RETIREMENT OBLIGATIONS REGISTRATION, TRANSFER AND EXCHANGE See also APPENDIX B, 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 City shall cause books (the Bond Register ) for the registration and for the transfer of the Bonds to be kept at the principal corporate trust office of the Registrar in Des Moines, Iowa. The City will authorize to be prepared, and the Registrar shall keep custody of, multiple Bond blanks executed by the City for use in the transfer and exchange of Bonds. 16

17 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 corporate trust 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 City 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 City 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. 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 City 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. TAX EXEMPTION Federal Income Tax Exemption The opinion of Bond Counsel will state that under present laws and rulings, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations under the Internal Revenue Code of 1986 (the Code ). Furthermore, the opinion will state that for the Bonds, such interest will be taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes). The opinions referred to in the preceding paragraph will be subject to the condition that the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. In the resolution authorizing the issuance of the Bonds, the City will covenant to comply with all such requirements. There may be certain other federal tax consequences to the ownership of the Bonds by certain taxpayers, including without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security and Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Bond Counsel will express no opinion with respect to other federal tax consequences to owners of the Bonds. Prospective purchasers of such bonds should consult with their tax advisors as to such matters. See APPENDIX D for a draft form of legal opinion for the Bonds. 17

18 Bank Qualification In the resolution authorizing the issuance of the Bonds, the City will designate such bonds as qualified tax exempt obligations within the meaning of Section 265(b)(3) of the Code relating to the ability of financial institutions to deduct from income for federal income tax purposes a portion of the interest expense that is allocable to tax-exempt obligations. LIMITED CONTINUING DISCLOSURE Because at the time of the delivery of the Bonds the City will be an obligated person (as such term is defined in Rule 15c2-12 (the Rule )) with respect to less than $10,000,000 in aggregate amount of outstanding municipal securities, including the Bonds, the City is exempt from the provisions of the Rule requiring the delivery of annual financial information to the nationally recognized securities information repositories specified in the Rule. However, pursuant to the Rule, the City will enter into a Continuing Disclosure Undertaking (the Undertaking ) for the benefit of the beneficial owners of the Bonds to send certain financial information upon request to any person or at least annually to the repository, if any, designated by the State of Iowa as the state depository (the SID ) and recognized as such by the Securities and Exchange Commission (the Commission ) for purposes of the Rule and to provide notice of certain material events to certain information repositories pursuant to the requirements of Section (b)(5) of the Rule adopted by the Commission under the Securities Exchange Act of As of the date of this Official Statement, the State of Iowa has not designated a SID. 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 C FORM OF CONTINUING DISCLOSURE CERTIFICATE. The City believes it has substantially complied with those undertakings previously entered into by it pursuant to the Rule. A failure by the City 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. See APPENDIX C FORM OF CONTINUING DISCLOSURE CERTIFICATE. Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5) of the Rule. MANDATORY REDEMPTION The Bonds coming due on June 1, 2013, June 1, 2015, June 1, 2017, June 1, 2019, June 1, 2021, June 1, 2023 and June 1, 2025 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: $135, % Term Bonds Due June 1, 2013; Yield 0.700% Redemption Year Amount $70, ,000 (stated maturity) 18