Official Statement. $32,000,000* Cedar Falls Community School District Black Hawk County, Iowa General Obligation School Bonds, Series 2017

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1 New Issue Investment Ratings: Date of Sale: Tuesday, February 7, 2017 Moody s Investors Service Between 10:30 and 11:00 A.M., C.S.T. (Closed Speer Auction) Standard & Poor s 11:00 A.M., C.S.T. (Sealed Bids) (Ratings Requested) (Alternate Bid Methods) Official Statement Assuming compliance with certain covenants, in the opinion of Ahlers & Cooney, P.C., Bond Counsel, under present law and assuming continued compliance with the requirements of the Internal Revenue Code of 1986, as amended (the Code ), the interest on the Bonds is 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. Interest on the Bonds is not exempt from present Iowa income taxes. The Bonds will NOT be designated as qualified tax-exempt obligations. See TAX MATTERS herein for a more detailed discussion. $32,000,000* Cedar Falls Community School District Black Hawk County, Iowa General Obligation School Bonds, Series 2017 Dated Date of Delivery Book-Entry Callable Non-Bank Qualified Due Serially June 1, The $32,000,000* General Obligation School Bonds, Series 2017 (the Bonds ) are being issued by the Cedar Falls Community School District, Black Hawk County, Iowa (the District ). Interest is payable semiannually on June 1 and December 1 of each year, commencing December 1, Interest is calculated based on a 360-day year of twelve 30-day months. 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, PRICES OR YIELDS AND CUSIP NUMBERS Principal Due Interest Price or CUSIP Principal Due Interest Price or CUSIP Amount June 1 Rate Yield Number(1) Amount June 1 Rate Yield Number(1) $1,145, % % $1,680, % % 1,385, % % 1,735, % % 1,400, % % 1,790, % % 1,425, % % 1,855, % % 1,450, % % 1,920, % % 1,475, % % 1,995, % % 1,510, % % 2,075, % % 1,545, % % 2,155, % % 1,585, % % 2,245, % % 1,630, % % Any consecutive maturities may be aggregated into term bonds at the option of the bidder, in which case the mandatory redemption provisions shall be on the same schedule as above. OPTIONAL REDEMPTION Bonds due June 1, , inclusive, are not subject to optional redemption. Bonds due June 1, , inclusive, are callable in whole or in part on any date on or after June 1, 2026, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the District and within any maturity by lot. See OPTIONAL REDEMPTION herein. PURPOSE, LEGALITY AND SECURITY The proceeds of the Bonds are expected to be used to: (i) provide funds to construct, build, furnish and equip a new elementary building and to improve the site; (ii) construct, build, furnish and equip additions to North Cedar and Orchard Hill elementary buildings, and to remodel, repair, improve, furnish and equip those buildings and improve those sites; and (iii) pay the costs of issuing the Bonds. See THE PROJECT herein. In the opinion of Bond Counsel, Ahlers & Cooney, P.C., Des Moines, Iowa, the Bonds will constitute valid and legally binding obligations of the District payable both as to principal and interest from ad valorem taxes levied against all taxable property within the corporate limits of the District 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. This Official Statement is dated January 24, 2017, and has been prepared under the authority of the District. An electronic copy of this Official Statement is available from the web site under Official Statement Sales Calendar. Additional copies may be obtained from Douglas J. Nefzger, Director of Business Affairs, Cedar Falls Community School District, 1002 West First Street, Cedar Falls, Iowa, 50613, or from the Registered Municipal Advisors to the District. *Subject to principal adjustment in accordance with the Official Terms of Offering. (1) CUSIP numbers appearing in this Official Statement have been provided by the CUSIP Service Bureau, which is managed on behalf of the American Bankers Association by S&P Capital IQ, a part of McGraw Hill Financial Inc. The District is not responsible for the selection of CUSIP numbers and makes no representation as to their correctness on the Bonds or as set forth on the cover of this Official Statement.

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 District 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 District. 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 District, shall constitute a Final Official Statement of the District with respect to the Bonds, as that term is defined in Rule 15c2-12. Any such addendum or addenda shall, on and after the date thereof, be fully incorporated herein and made a part hereof by reference. Alternatively, such final terms of the Bonds and other information may be included in a separate document entitled Final Official Statement rather than through supplementing the Official Statement by an addendum or addenda. No dealer, broker, salesman or other person has been authorized by the District 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 District. Certain information contained in the Official Statement and the Final Official Statement may have been obtained from sources other than records of the District 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 DISTRICT 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.

3 TABLE OF CONTENTS Page BOND ISSUE SUMMARY... 3 CEDAR FALLS COMMUNITY SCHOOL DISTRICT... 4 INTRODUCTORY STATEMENT... 4 Authorization... 4 BONDHOLDERS RISKS... 5 Secondary Market... 5 Ratings Revision or Loss... 5 Forward-Looking Statements... 5 Tax Matters and Loss of Tax Exemption... 5 DTC-Beneficial Owners... 6 Other Factors... 6 Tax Levy Procedures... 6 Debt Payment History... 6 Summary... 7 THE District... 7 History and Overview of the Cedar Falls Area... 7 District Organization and Services... 7 Academic Services... 8 Physical Plant... 8 Enrollment... 9 District Funds and Revenues Historic and Potential State and Federal Actions That Impact Current and Future District Budgets Iowa School Cash Anticipation Program ( ISCAP ) Pensions SOCIOECONOMIC INFORMATION Population Employment Housing Income Agriculture Retail Sales THE PROJECT DEBT INFORMATION PROPERTY ASSESSMENT AND TAX INFORMATION Property Tax Assessment Property Tax Collection Levy Limits Tax Levy Procedures Utility Property Tax Replacement Tax Increment Financing Legislation FINANCIAL INFORMATION Financial Reports No Consent or Updated Information Requested of the Auditor Summary Financial Information EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS Pensions Other Post-Employment Benefits (OPEB) REGISTRATION, TRANSFER AND EXCHANGE TAX MATTERS Tax Exemption NOT Qualified Tax Exemption Obligations Tax Accounting Treatment of Discount and Premium on Certain Bonds (i)

4 Other Tax Advice Audits Reporting and Withholding Tax Legislation Enforcement Opinion Bond Counsel Review CONTINUING DISCLOSURE OPTIONAL REDEMPTION LITIGATION LEGAL MATTERS OFFICIAL STATEMENT AUTHORIZATION INVESTMENT RATINGS UNDERWRITING MUNICIPAL ADVISOR CERTIFICATION APPENDIX A - FISCAL YEAR 2016 AUDITED FINANCIAL STATEMENTS APPENDIX B - DESCRIBING BOOK-ENTRY-ONLY ISSUANCE APPENDIX C - PROPOSED FORM OF LEGAL OPINION APPENDIX D - PROPOSED CONTINUING DISCLOSURE CERTIFICATE OFFICIAL BID FORM OFFICIAL TERMS OF OFFERING (ii)

5 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 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: Cedar Falls Community School District, Black Hawk County, Iowa. Issue: $32,000,000* General Obligation School Bonds, Series Dated Date: Date of delivery (expected to be on or about March 13, 2017). Interest Due: Each June 1 and December 1, commencing December 1, Principal Due: Optional Redemption: Authorization: Security: Investment Ratings: Purpose: Tax Matters: NOT Bank Qualified: Bond Registrar/Paying Agent: Serially each June 1, commencing June 1, 2018 through 2036, as detailed on the front page of this Official Statement. Bonds maturing on or after June 1, 2027, are callable at the option of the District on any date on or after June 1, 2026, 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 296, and all laws amendatory thereof and supplementary thereto, and the authority of an approving referendum held in the District on April 5, The Bonds are valid and legally binding obligations of the District 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. Investment ratings for the Bonds have been requested from Moody s Investors Service, New York, New York and Standard & Poor s, a Division of the McGraw-Hill Companies, New York, New York. See INVESTMENT RATINGS herein. The proceeds of the Bonds are expected to be used to: (i) provide funds to construct, build, furnish and equip a new elementary building and to improve the site; (ii) construct, build, furnish and equip additions to North Cedar and Orchard Hill elementary buildings, and to remodel, repair, improve, furnish and equip those buildings and improve those sites; and (iii) pay the costs of issuing the Bonds. See THE PROJECT herein. Ahlers & Cooney, P.C., Des Moines, Iowa, will provide an opinion as to the tax exemption of the Bonds as discussed under TAX MATTERS in this Official Statement. Interest on the Bonds is not exempt from present State of Iowa income taxes. See APPENDIX C for a draft form of legal opinion for the Bonds. The Bonds are not qualified tax-exempt obligations under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. Bankers Trust Company, Des Moines, Iowa. Delivery: The Bonds are expected to be delivered on or about March 13, Book-Entry Form: Denomination: Municipal Advisor: *Subject to change. 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. $5,000 or integral multiples thereof. Speer Financial, Inc., Waterloo, Iowa and Chicago, Illinois. 3

6 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 CEDAR FALLS COMMUNITY SCHOOL DISTRICT Black Hawk County, Iowa Board Of Directors Joyce Coil President Susie Hines Vice President Jeff Hassman Dr. James Kenyon Susan Lantz Jenny Leeper Doug Shaw, Ph.D. Officials Andy Pattee, Ed.D. Superintendent Adrian P. Talbot, Ed.D., S.P.H.R. Director of Human Resources Pam Zeigler Director of Elementary Education Douglas J. Nefzger Director of Business Affairs Secretary to the Board of Directors Daniel E. Conrad Director of Secondary Education Daniel Lynch Treasurer to the Board of Directors INTRODUCTORY STATEMENT This Official Statement presents certain information relating to the Cedar Falls Community School District (the District ), in connection with the sale of the District s General Obligation Bonds (the Bonds ). The Bonds are being issued to provide funds to construct, build, furnish and equip a new elementary building and to improve the site; to construct, build, furnish and equip additions to North Cedar and Orchard Hill elementary buildings, and to remodel, repair, improve, furnish and equip those buildings and improve those sites; and pay the costs of issuing the Bonds. See THE PROJECT herein. Authorization The Bonds are being issued pursuant to the Code of Iowa, 2015, as amended, Chapter 296 and the authority of approving referenda held in the District on April 5,

7 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Secondary Market BONDHOLDERS RISKS There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history of economic prospects connected with a particular issue, and secondary marketing practices in connection with a particular Bond or Bonds issue are suspended or terminated. Additionally, prices of bond or note issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price of the Bonds. Ratings Revision or Loss Moody s Investors Service, Inc. ( Moody s ) has assigned a rating of and Standard and Poor s ( S&P ) has assigned a rating of to the Bonds. Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance that the rating will continue for any given period of time, or that such rating will not be revised, suspended or withdrawn, if, in the judgment of Moody s and S&P, circumstances so warrant. A revision, suspension or withdrawal of a rating may have an adverse effect on the market price of the Bonds. Rating agencies are currently not regulated by any regulatory body. Future regulation of rating agencies could materially alter the methodology, rating levels, and types of ratings available, for example, and these changes, if ever, could materially affect the market value of the Bonds. Forward-Looking Statements This Official Statement contains statements relating to future results that are forward-looking statements as defined in the Private Securities Litigation Reform Act of When used in this Official Statement, the words estimate, forecast, intend, expect and similar expressions identify forward-looking statements. Any forward-looking statement is subject to uncertainty. Accordingly, such statements are subject to risks that could cause actual results to differ, possibly materially, from those contemplated in such forward-looking statements. Inevitably, some assumptions used to develop forward-looking statements will not be realized or unanticipated events and circumstances may occur. Therefore, investors should be aware that there are likely to be differences between forward looking statements and the actual results. These differences could be material and could impact the availability of funds of the District to pay debt service when due on the Bonds. Tax Matters and Loss of Tax Exemption As discussed under the heading TAX MATTERS herein, the interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of the Bonds, as a result of acts or omissions of the District in violation of its covenants in the resolution authorizing the issuance of the Bonds (the Bond Resolution ). Should such an event of taxability occur, the Bonds would not be subject to a special prepayment and would remain outstanding until maturity or until prepaid under the prepayment provisions contained in the Bonds, and there is no provision for an adjustment of the interest rate on the Bonds. It is possible that further legislation will be proposed or introduced that could result in changes in the way that tax exemption is calculated, or whether interest on certain securities are exempt from taxation at all. Prospective purchasers should consult with their own tax advisors regarding the any pending or proposed federal income tax legislation. The likelihood of the any pending legislation being enacted or whether the currently proposed terms of the pending legislation will be altered or removed during the legislative process cannot be reliably predicted. 5

8 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 It is also possible that actions of the District after the closing of the Bonds will alter the tax status of the Bonds, and, in the extreme, remove the tax exempt status from the Bonds. In that instance, the Bonds are not subject to mandatory prepayment, and the interest rate on the Bonds does not increase or otherwise reset. A determination of taxability on the Bonds, after closing of the Bonds, could materially adversely affect the value and marketability of the Bonds. DTC-Beneficial Owners Beneficial Owners of the Bonds may experience some delay in the receipt of distributions of principal of and interest on the Bonds since such distributions will be forwarded by the Paying Agent to DTC and DTC will credit such distributions to the accounts of the Participants which will thereafter credit them to the accounts of the Beneficial Owner either directly or indirectly through indirect Participants. Neither the District nor the Paying Agent will have any responsibility or obligation to assure that any such notice or payment is forwarded by DTC to any Participants or by any Participant to any Beneficial Owner. In addition, since transactions in the Bonds can be effected only through DTC Participants, indirect participants and certain banks, the ability of a Beneficial Owner to pledge the Bonds to persons or entities that do not participate in the DTC system, or otherwise to take actions in respect of such Bonds, may be limited due to lack of a physical certificate. Beneficial Owners will be permitted to exercise the rights of registered Owners only indirectly through DTC and the Participants. See APPENDIX B Describing Book-Entry Only Issuance. Other Factors An investment in the Bonds involves an element of risk. In order to identify risk factors and make an informed investment decision, potential investors should be thoroughly familiar with this entire Official Statement (including the Appendices hereto) in order to make a judgment as to whether the Bonds are an appropriate investment. Tax Levy Procedures The Bonds are general obligations of the District, payable from and secured by a continuing ad valorem tax levied against all of the taxable property valuation within the District. See PROPERTY ASSESSMENT AND TAX INFORMATION herein for more details. As part of the budgetary process each fiscal year, the District will have an obligation to request a debt service levy to be applied against all of the taxable property within the District. A failure on the part of the District to make a timely levy request or a levy request by the District that is inaccurate or is insufficient to make full payments of the debt service of the Bonds for a particular fiscal year may cause Bondholders to experience delay in the receipt of distributions of principal of and/or interest on the Bonds. 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 District and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. Debt Payment History The District knows of no instance in which it has intentionally defaulted in the payment of principal and interest on any of its debt. 6

9 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Summary The foregoing is intended only as a summary of certain risk factors attendant to an investment in the Bonds. In order for potential investors to identify risk factors and make an informed investment decision, potential investors should become thoroughly familiar with this entire Official Statement and the Appendices hereto. History and Overview of the Cedar Falls Area THE DISTRICT The District includes the City of Cedar Falls (the City ) and certain unincorporated areas in Black Hawk County (the County ). The District is located entirely within the County and encompasses a total of approximately 61 square miles. The County is located in northeast Iowa and was named for the famous Native American leader Chief Black Hawk ( ), the principal figure in the Black Hawk War of The first permanent residents of the County were the Sturgis and Adams families who settled in the County in In 1850, the population of the County was 135; the City was the largest town. The population increased in the City of Waterloo and in 1855 the county seat was moved from the City to Waterloo. By 1868, 23,000 acres of land was under cultivation in the County. In 2010, the County was the fourth largest in the State of Iowa (the State ), with a population of 131,090. In 1847 the first school, a log cabin, was built in the City. In 1864, two brick school houses were built to replace the original school. In 1935 the Independent School District of Cedar Heights was annexed into the Cedar Falls School District. Additional mergers and reorganization of outlying districts, between 1946 and 1960, resulted in the current Cedar Falls Community School District. Approximately 98% of the District s students are from the City. The City and the neighboring City of Waterloo are the primary urban centers in the region and in the County. As of the 2010 Census, the City represented approximately 30% and Waterloo approximately 52% of the County s population. The City, with a 2010 population of 39,260 and a total land area of approximately 29.1 square miles, is located adjacent to the City of Waterloo. The City is 105 miles northeast of Des Moines, 192 miles south of Minneapolis, Minnesota and 275 miles west of Chicago, Illinois. The City is accessible by U.S. Highways 20, 63 and 218 and State Highways 21, 27, 57 and 58. Interstate Highway 380 links the City and Waterloo with the southeastern area of the State and connects with Interstate Highway 80. Interstate Highway 35 is located about 65 miles west of the City. Rail service is provided by the Union Pacific Railroad, the Iowa Northern Railroad Company, and the Illinois Central Gulf Railroad (Canadian National). Bus transportation is provided in the City by the Metropolitan Transit Authority and both in and out of state by three bus lines. Commercial and charter air service is available at the Waterloo Regional Airport. The City is home of the University of Northern Iowa. District Organization and Services The District is an independent unit of government authorized under Section of the Iowa Code. The governing body of the District is comprised of a seven-member Board of Directors (the Board ) elected for staggered four-year terms. A President and Vice President are selected annually from among the elected members of the Board. Daily administrative and academic functions of the District are the responsibility of the Superintendent, who is appointed by the Board. Also appointed by the Board are a Secretary, Treasurer and Legal Counsel. The District is the 17th largest of Iowa s 336 public school systems. The K-12 enrollment is approximately 5,311 students. The District operates a total of one high school, two junior high schools and six elementary schools. 7

10 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 The District has full-time equivalent ( FTE ) professional employees (including administrators and teachers) and support staff. Of the teaching staff, approximately 57% have advanced academic degrees. District teachers are represented by the Cedar Falls Education Association. They are operating under a contract that expires June 30, 2018 with economic issues negotiated annually. The secretarial and clerical staff are represented by the Cedar Falls Educational Support Professionals. They are operating under a one year contract that expires June 30, The maintenance and custodial staff are represented by the Teamsters Union. They are operating under a contract that expires June 30, 2018 with economic issues negotiate annually. Food service employees are represented by the American Federation of State, County and Municipal Employees. They are operating under a contract which expire June 30, Under present Iowa law, public employees are not allowed to strike. The District considers the relationship with its employees to be good. The District owns 43 buses and operates 31 bus routes, including four routes for handicapped students. Approximately 2,374 students are transported daily. School meals are prepared in two locations with approximately 618,244 meals served annually. Academic Services The District provides a full range of educational services appropriate to students in grades pre-kindergarten through twelve. These services include basic, regular and enriched academic education, special education for children with special needs, vocational education, and numerous individualized programs such as specialized instruction for students at-risk and for limited-english-speaking students. The District provides special education services for approximately 531 students with learning, physical, mental and other disabilities. Through contractual arrangements, approximately 34 students with special education needs are served in other facilities or in other districts. In addition, the District has a comprehensive K-12 talented and gifted program. Instructionally, a full complement of programs are available for District students. All instruction programs are totally revised and upgraded on a cyclical seven-year cycle with all professional staff members from the affected area involved. The District also provides comprehensive programming for at-risk students and families. The learning centers in the District have access to computers, and the internet. There is a ratio of approximately one computer for every student in the District. Business education programs that highlight networked computer and computerized technological equipment are available in industrial technology classrooms. The District also offers foreign language classes in German, French, and Spanish. Physical Plant The District s facilities include 9 major education buildings built between 1953 and 2012, as summarized below. Date Originally Dates of In-District Enrollment Building Constructed Additions October 2016 Elementary Schools: Cedar Heights Hansen Lincoln North Cedar , 1966, 1971, Orchard Hill , 1966, Southdale , 1968, 1973, 1983, 2000, 2007, Junior High Schools: Holmes , 1977, 2001, Peet , 1978, 1990, High School: Senior , 1963, 1968, 1973, 1985, 2001, ,127 8

11 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Enrollment Enrollment for the District as of October for each school year is presented below. District Enrollment Figures(1) Certified School Year Enrollment , , , ,754 (2) ,781 (2) , , , , ,147 Notes: (1) Source: the Iowa Department of Education. (2) Includes students who attended Malcolm Price Laboratory School located at the University of Northern Iowa, as required by the Iowa Legislature effective July 1, See District Open Enrollment Enrolled Out below. grades. There are two private schools in the District with a combined enrollment of 383 for kindergarten through twelfth Commencing with the school year beginning July 1, 1990, Iowa Code Section requires each Iowa school district to allow students located in such district to enroll in another Iowa public school. Any such student must commit to a one-year period at the receiving district. The receiving district receives from the home district the foundation level of State aid and property tax for that student. The District has and may have in the future certain students enrolling into and enrolling out of the District. Presented below are open enrollment results for the period outlined: District Open Enrollment October Enrolled In Enrolled Out (2) (2) (3) Notes: (1) Source: the Iowa Department of Education. (2) Includes students who attended Malcolm Price Laboratory School. Effective July 1, 2010, students at the Malcolm Price Laboratory Schools are required to be included in the District s Certified Enrollment but must then be counted as Enrolled Out under Iowa s Open Enrollment statute. See District Enrollment Figures herein. (3) Malcolm Price Laboratory School Closed June 30,

12 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 District Funds and Revenues The District is organized and operates pursuant to Chapter 274 of the Code. The District maintains various funds. Presented below is a description of a few of those funds. The General Fund: The General Fund receives those revenues of the District not specifically required to be deposited in other funds. General Fund revenues are obtained from ad valorem taxation in the District, State foundation aid payments, and minimal federal sources. In addition, revenues generated as miscellaneous revenues including, but not limited to, general fund investment income, tuition income, open enrollment tuition payments are deposited in the general fund. The bulk of the General Fund revenues are derived from local and State foundation aid sources. The District receives a mix of property tax and State foundation aid based on a formula which takes into account District enrollment, District property valuations and District costs per pupil. The description of the formula is found in Chapter of the Code and reads as follows: For a budget year, each school district in the State is entitled to receive foundation aid in an amount per pupil equal to the difference between the amount per pupil of foundation property tax in the district, and the combined district cost per pupil, whichever is less. The Code allows for an Supplemental State Aid, defined as... the amount by which State cost per pupil and district cost per pupil will increase from one budget year to the next which is calculated on or before September 15 of each year by the Department of Management of the State. Shown below are the District s historic per pupil cost and State Average: Fiscal Year District Per Pupil Cost(1) State Average Per Pupil Cost(1) $6, $6, , , , , , , , ,591 Note: (1) Source: the Iowa Department of Management. The District reports a revenue mix in the general fund as follows: Fiscal Year Property Tax Revenues(1) State Revenues(1) $17,476, $22,494, ,337, ,561, ,839, ,797, ,537, ,484, ,776, ,066,619 Note: (1) Source: the Iowa Department of Management. Instructional Support. Districts are allowed to fund additional educational programs or enhanced current programs under the instructional support program, which allows a district to generate 10% of the total regular program district cost for the budget year. These revenues can be locally generated from either ad valorem taxation, income surtax or both. In addition, revenues are appropriated by the State and provided to each district depending on formula. The District can participate in the instructional support program by generating local revenues after either (i) scheduling and holding a public hearing and an election on the proposed funding, programs, and mix of funding, which requires 50% approval of those voting at a special district election and allows the program to be funded for a period of ten years; or (ii) the program may be funded for up to five years, after scheduling and holding a public hearing on the program and mix of funding, which can then be implemented after a 28-day period during which voters of the District can either force an election on participation in the Program or force the Board to rescind action to participate in the Program. 10

13 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 This instructional support tax has been in effect in this District since the 1992 and was renewed by voters of the District on February 1, 2011 for an additional 10 years. The levy will now expire on June 30, Shown below is a summary of the Instructional Support Levy ( ISL ). Fiscal Year ISL Property Tax(1) ISL State Aid(1) ISL Income Surtax(1) $2,234, $0... $ ,373, ,399, ,444, ,549, Note: (1) Source: the Iowa Department of Management. Management Levy. A district can levy for certain costs relating to payment of employee benefits, tort insurance and early retirement outside of the General Operating Levy. These revenues are generated through a property tax, and there is no limitation on the tax rate or amount. Presented below are the management fund levies as reported for the periods indicated: Fiscal Year Management Levy(1) $550, , , , ,000 Note: (1) Source: the Iowa Department of Management. Education Improvement Program. The District can schedule and hold an election on funding the educational improvement program if the District s per pupil cost is in excess of 110% of the State average per pupil cost, which takes 50% approval and is funded by a combination of property tax and income surtax. The District does not participate in the program. Cash Reserve Levy. The District can certify as a part of its General Fund levy (in addition to the property tax levied as a part of each of the General Fund levies) an amount for creating a cash reserve. This levy covers cash-flow needs and funds programs approved by the Iowa Department of Education School Budget Review Committee when the above revenue sources are reduced. This is levied annually at the discretion of the Board. Presented below are the cash reserve levies and special education deficits as reported by the District for the periods indicated: Fiscal Year Cash Reserve Levy(1) Cash Reserve - SBRC(1) $ 0 $1,148, ,754, , , , , ,100,570 Note: (1) Source: the Iowa Department of Management. Physical Plant & Equipment Levies. At the Board s discretion, the District may annually levy an ad valorem tax of $0.33 per $1,000 of assessed valuation for certain capital and land costs. In addition, upon voter approval, the District can institute a property tax or property tax income surtax that generates $1.34 per $1,000 of assessed valuation. The voters of the District re-approved, at an election held on December 6, 2016, the Physical Plant and Equipment Levy for a $1.34 per $1,000 of assessed valuation for 10 years which will end, unless re-approved, with the 2028 fiscal year. The District has historically levied the Board discretionary Physical Plant and Equipment Levy. Debt Service Levy. The debt service levy is an ad valorem tax levied for the payment of bonds and interest and is approved at a special election of the District with minimum of 60% in favor of the proposal. The voters of the District approved the issuance of the Bonds at an election held on April 5, Principal and interest on the Bonds will be paid from this levy. Capital Project Fund. The revenue from the one-cent statewide school infrastructure sales, services and use tax must be deposited into the Capital Project Fund of the District. 11

14 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Historic and Potential State and Federal Actions That Impact Current and Future District Budgets The District s operating budget is subject to change based on events outside of its control, including State and Federal funding. There may be changes in funding that are unknown or unanticipated at this time. Presented below is a discussion of some of the known changes that might impact the District s operating budget. State Funding. After the appropriation of State Aid (and after the adoption of the District s budget for a particular fiscal year), the Governor and the General Assembly have the ability to rescind all or a portion of the appropriation. Certain areas of the State s budget are exempt from these potential cuts, however, K-12 and community college funding are not exempt from rescission. Historically, rescissions were imposed in an across-the-board fashion, and all state funding was reduced in a percentage format. This had the potential to impact schools with low valuation per pupil much greater than schools with high per pupil valuations. In the 2002 General Assembly, the formula for rescission was altered for K-12 funding, such that all future rescissions, if any, would be applied to K-12 education on a per-pupil basis. Historically, the Governor has rescinded state aid since 1980; presented below are the cuts since 2000 and the fiscal year affected: Fiscal Year Percentage Rescission % % % % Note: The rescission applies to the General Fund of the District. The revenues pledged for the repayment of the Bonds are not impacted in any way be reductions in State Aid. Federal Funding. Federal legislation with respect to student achievement in future years may result in sanctions that could have financial implications for the general fund operating budget. The No Child Left Behind act of 2001 applies sanctions to under-performing schools that, if the school remains under-performing (as defined by the act) allows the parents of pupils in the school to move to another school, transferring their funding to the new school. This act applies to individual school facilities and does not necessarily apply to school districts, however, the revenue impact to a school district could be material if the school district has a school facility that under-performs and starts to lose enrollment. Iowa School Cash Anticipation Program ( ISCAP ) The District is eligible, but has not participated in ISCAP since ISCAP is a program of the Iowa Association of School Boards and is designed to provide funds to participating districts during periods of cash deficits. ISCAP is funded by a semiannual issuance of anticipatory warrants. See DISTRICT DEBT INFORMATION herein. Pensions All District employees qualify for participation in the Iowa Public Employees Retirement System (IPERS). Both the District and its employees contribute to this fund. The following table sets forth the contributions made by the District and employees to IPERS for the period indicated. The District cannot predict the levels of funding that will be required in the future. % of Payroll % of Payroll Fiscal Year Paid by the District Paid by Employee % 5.95% % 5.95% % 5.95% % 5.95% % 5.95% 12

15 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 The District s share, payable from the applicable funds of the District, is provided by an annual levy of taxes without limit or restriction as to rate or amount against all the taxable property of the District. All contributions are on a current basis. The fund is administered by the State with administration costs paid from income derived from invested funds. Given an unfunded actuarial liability and unrecognized actuarial investment loss, additional contributions may be necessary in the future. For further information on the District s pension and retirement benefits, see EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS herein. SOCIOECONOMIC INFORMATION Demographic information is not available for the District. The following statistics principally pertain to the City, additional comparisons are made with the County and the State of Iowa (the State ). Population The following table reflects population trends for the City, the County and the State. Population Comparison(1) The Percent The Percent The Percent Year City Change County Change State Change ,597 n/a 132,916 n/a 2,824,376 n/a , % 137, % 2,913, % ,298 (5.57%) 123,798 (10.27%) 2,776,755 (4.70%) , % 128, % 2,926, % , % 131, % 3,046, % Note: (1) Source: U.S. Bureau of the Census. Employment Following are lists of large employers located in the District and in the surrounding area. Major Area Employers(1) Approximate Location Name Business or Product Employment(2) Waterloo... John Deere... Manufacturing... 5,600 Waterloo... Wheaton Franciscan Healthcare... Health Care... 3,060 Waterloo... Tyson Fresh Meats... Food Processing... 2,500 Cedar Falls... University of Northern Iowa... Higher Education... 1,740 Waterloo... Unity Point Health Care... Health Care... 1,615 Waterloo... Waterloo Community Schools... Public Education... 1,610 Waterloo/Cedar Falls... Hy-Vee... Grocery Stores... 1,545 Waterloo/Cedar Falls... Wal-Mart... Discount Stores... 1,045 Cedar Falls... Target Regional Distribution... Retail Distribution Waterloo... CBE Companies, Inc.... Financial Waterloo/Cedar Falls... Area Education Agency Educational Support Waterloo... Bertch Cabinet Manufacturing... Manufacturing Waterloo... Black Hawk County... Government Cedar Falls... Cedar Falls Community Schools... Education Waterloo... Omega Cabinetry Ltd.... Manufacturing Waterloo... Hawkeye Community College... Education Notes: (1) Source: Greater Cedar Valley Alliance, 2016 Manufacturers News Inc. and a selected telephone survey. (2) Includes part-time employees. 13

16 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 The following tables show employment by industry and by occupation for the City, the County and the State as reported by the U.S. Census Bureau American Community Survey 5-year estimated values. Employment By Industry(1) The City The County The State Classification Number Percent Number Percent Number Percent Agriculture, forestry, fishing and hunting, and mining % 1, % 62, % Construction % 3, % 95, % Manufacturing... 2, % 12, % 233, % Wholesale trade % 1, % 45, % Retail trade... 2, % 8, % 182, % Transportation and warehousing, and utilities % 2, % 71, % Information % % 28, % Finance and insurance, and real estate and rental and leasing... 1, % 3, % 118, % Professional, scientific, and management, and administrative and waste management services... 1, % 4, % 110, % Educational services, and health care and social assistance... 7, % 17, % 379, % Arts, entertainment, and recreation, and accommodation and food services , % 6, % 116, % Other services, except public administration... 1, % 3, % 67, % Public administration % 1, % 50, % Total... 22, % 67, % 1,562, % Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5-Year Estimates from Employment By Occupation(1) The City The County The State Classification Number Percent Number Percent Number Percent Management, business, science and arts occupations... 9, % 21, % 536, % Service occupations... 4, % 12, % 258, % Sales and office occupations... 5, % 16, % 369, % Natural resources, construction, and maintenance occupations... 1, % 4, % 147, % Production, transportation, and material moving occupations... 2, % 12, % 250, % Total... 22, % 67, % 1,562, % Note: (1) Source: U. S. Bureau of the Census, American Community Survey 5-Year Estimates from The following shows the annual average unemployment rates for the City, the County, the State and the United States. Annual Average Unemployment Rates(1) Calendar The The The United Year City County State States % 3.8% 3.7% 4.6% % 4.8% 4.2% 5.8% % 6.2% 6.4% 9.3% % 6.1% 6.0% 9.6% % 5.7% 5.5% 8.9% % 5.5% 5.1% 8.1% % 4.7% 4.7% 7.4% % 5.4% 4.2% 6.2% % 4.4% 3.7% 5.3% 2016(2) %(3) 4.1% 3.6% 4.9% Notes: (1) Source: Iowa Workforce Development and U.S. Bureau of Labor Statistics. (2) Preliminary rates for the month of November (3) Information is no longer available for the City. The percentage reflects the unemployment rate for the Waterloo/Cedar Falls area. 14

17 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Housing The U.S. Census Bureau 5-year estimated values reported that the median value of the City s owner-occupied homes was $170,500. This compares to $130,200 for the County and $126,300 for the State. The following table represents the five year average market value of specified owner-occupied units for the City, the County and the State at the time of the American Community Survey. Home Values(1) The City The County The State Value Number Percent Number Percent Number Percent Less than $50, % 3, % 102, % $50,000 to $99, % 8, % 221, % $100,000 to $149, , % 9, % 205, % $150,000 to $199, , % 7, % 149, % $200,000 to $299, , % 5, % 131, % $300,000 to $499, % 1, % 56, % $500,000 to $999, % % 14, % $1,000,000 or more % % 4, % Total... 9, % 35, % 884, % Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates Mortgage Status(1) The City The County The State Mortgage Status Number Percent Number Percent Number Percent Housing units with a mortgage... 5, % 22, % 546, % Housing units without a mortgage... 3, % 13, % 338, % Total... 9, % 35, % 884, % Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates Income The U.S. Census Bureau 5-year estimated values reported that the City had a median family income of $81,996. This compares to $63,011 for the County and $66,829 for the State. The following table represents the distribution of family incomes for the City, the County and the State at the time of the American Community Survey. Family Income(1) The City The County The State Income Number Percent Number Percent Number Percent Under $10, % 1, % 27, % $10,000 to $14, % % 18, % $15,000 to $24, % 2, % 52, % $25,000 to $34, % 2, % 67, % $35,000 to $49, % 4, % 108, % $50,000 to $74, , % 7, % 178, % $75,000 to $99, , % 4, % 136, % $100,000 to $149, , % 4, % 133, % $150,000 to $199, % 1, % 40, % $200,000 or more % % 32, % Total... 8, % 30, % 797, % Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates 2011 to

18 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 The U.S. Census Bureau 5-year estimated values reported that the City had a median household income of $55,808. This compares to $48,369 for the County and $52,716 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 American Community Survey. Household Income(1) The City The County The State Income Number Percent Number Percent Number Percent Less than $10, , % 4, % 75, % $10,000 to $14, % 2, % 63, % $15,000 to $24, , % 5, % 132, % $25,000 to $34, , % 6, % 133, % $35,000 to $49, , % 8, % 179, % $50,000 to $74, , % 10, % 246, % $75,000 to $99, , % 6, % 167, % $100,000 to $149, , % 6, % 152, % $150,000 to $199, % 1, % 44, % $200,000 or more % 1, % 37, % Total... 14, % 52, % 1,232, % Note: (1) Source: U.S. Bureau of the Census, American Community Survey 5-year estimates Agriculture Shown below is information on the agricultural value of the County and the statewide average. Average Value Per Acre(1) Average Value Per Acre: Black Hawk County... $10,511 $11,239 $9,982 $9,198 $8,599 State of Iowa... 8,296 8,716 7,943 7,633 7,183 Note: (1) Source: Cooperative Extension Service - Iowa State University. Retail Sales The Department of Revenue of the State of Iowa provides retail sales figures based on sales tax reports for years ending June 30. The Department of Revenue figures provide recent data to confirm trends in retail sales activity in the City. Retail Taxable Sales(1) Fiscal Year Taxable Annual Percent Ending June 30 Sales Change + (-) 2007(2)... $448,139,320 n/a 2008(2) ,306, % ,350, % ,012,054 (0.86%) ,979, % ,544, % ,668, % ,905, % ,772, % ,418, % Growth from 2007 to % Notes: (1) Source: the Iowa Department of Revenue. (2) Fiscal years 2007 and 2008 amounts reflect a year ending March 31st. 16

19 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 THE PROJECT The proceeds of the Bonds are expected to be used to: (i) provide funds to construct, build, furnish and equip a new elementary building and to improve the site; (ii) to construct, build, furnish and equip additions to North Cedar and Orchard Hill elementary buildings, and to remodel, repair, improve, furnish and equip those buildings and improve those sites; and (iii) pay the costs of issuing the Bonds. The Project will include the construction of the new Aldrich Elementary School which will serve students in pre-kindergarten through sixth grade; and additional classrooms to North Cedar and Orchard Hill elementary buildings. DEBT INFORMATION After issuance of the Bonds, the District will have outstanding $32,000,000* principal amount of general obligation debt. In addition, the District has outstanding approximately $22,000,000 principal amount of School Infrastructure Sales, Services and Use Tax Revenue debt. The District has a general obligation legal debt limit equal to 5% of Actual Valuation. For the January 1, 2015 Actual Valuation of $3,185,619,469 (including tax increment valuation and excluding military exemption valuation) applied to fiscal year 2016/17, the total limit is $159,280,973. Including the Bonds, the estimated principal amount of bonded and non-bonded debt applicable to this limit is $32,000,000*, resulting in a legal debt margin of $127,280,973*. It has not been determined whether the District s Sales Tax Revenue Bonds count against the constitutional debt limit. If included the aggregate outstanding debt would be $54,000,000*, resulting in a legal debt margin of $105,280,973*. The District does not anticipate issuing any additional debt this calendar year. General Obligation Debt(1) (Principal Only) Year Total General Ending The Obligation Cumulative Retirement(2) June 30 Bonds(2) Debt(2) Amount Percent $ 0 $ 0 $ % ,145,000 1,145,000 1,145, % ,385,000 1,385,000 2,530, % ,400,000 1,400,000 3,930, % ,425,000 1,425,000 5,355, % ,450,000 1,450,000 6,805, % ,475,000 1,475,000 8,280, % ,510,000 1,510,000 9,790, % ,545,000 1,545,000 11,335, % ,585,000 1,585,000 12,920, % ,630,000 1,630,000 14,550, % ,680,000 1,680,000 16,230, % ,735,000 1,735,000 17,965, % ,790,000 1,790,000 19,755, % ,855,000 1,855,000 21,610, % ,920,000 1,920,000 23,530, % ,995,000 1,995,000 25,525, % ,075,000 2,075,000 27,600, % ,155,000 2,155,000 29,755, % ,245,000 2,245,000 32,000, % Total... $32,000,000 $32,000,000 Notes: (1) Source: the District. (2) Subject to change. *Subject to change. 17

20 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Statement of Bonded Indebtedness(1)(2) District Actual Value, January 1, $3,185,619,469 District Taxable Value, January 1, $1,973,904,409 Per Capita Applicable Ratio to District Ratio to District (2014 Est. Total Percent Amount Actual Value Taxable Value Pop 41,989) Direct Bonded Debt(3)... $32,000, % $32,000, % 1.62% $ Overlapping Debt: City of Cedar Falls... $15,575, % $15,575, % 0.79% $ Black Hawk County... 37,940, % 13,225, % 0.67% Hawkeye Community College (4)... 3,680, % 742, % 0.04% Total Direct and Overlapping Bonded Debt(3)... $61,543, % 3.12% $1, Per Capita Actual Value... $75, Per Capita Taxable Value... $47, Notes: (1) Source: the District, Audited Financial Statements and EMMA for the City, County and Community College overlapping debt. (2) As of the date of sale for the Direct Bonded Debt and January 6, 2017 for Overlapping Debt. (3) Subject to change. (4) Excludes $10,880,000 in Industrial New Jobs Training Certificates, which are retired by proceeds from anticipated job credits from withholding taxes. Property Tax Assessment PROPERTY ASSESSMENT AND 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, multi-residential, agricultural and commercial valuations are as follows: Percentages for Taxable Valuation After Rollbacks(1) Multi- Ag Land Fiscal Year Residential Residential(2) & Buildings Commercial 2008/ % N/A % % 2009/ % N/A % % 2010/ % N/A % % 2011/ % N/A % % 2012/ % N/A % % 2013/ % N/A % % 2014/ % N/A % % 2015/ % N/A % % 2016/ % % % % 2017/ % % % % Notes: (1) Source: the Iowa Department of Revenue. (2) New category beginning with fiscal year 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, 2016, are used to calculate tax liability for the tax year starting July 1, 2017 through June 30,

21 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 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 District. 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 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. Actual (100%) Valuations for the District(1)(2) Fiscal Year: 2012/ / / / /17 Property Class Levy Year: Residential... $2,142,974,890 $2,188,172,210 $2,226,787,510 $2,274,673,570 $2,394,057,310 Agricultural... 35,680,860 35,610,640 50,457,630 50,061,940 47,674,790 Commercial ,062, ,428, ,501, ,780, ,974,884 Industrial... 38,726,020 43,553,390 47,309,390 47,901,680 48,155,560 Multi-residential(3) ,890,166 Railroads... 2,574,413 2,987,312 3,704,579 4,036,027 4,259,141 Utilities without Gas and Electric(4)... 8,945,426 8,637,599 7,684,203 6,670,692 6,018,004 Gas and Electric Utility(4)... 50,784,148 53,606,842 54,839,641 54,312,347 57,971,366 Less: Military Exemption... (3,822,528) (3,733,632) (3,659,552) (3,528,060) (3,381,752) Total... $2,890,925,689 $2,928,263,241 $3,006,625,081 $3,051,908,346 $3,185,619,469 Percent Change +(-) %(5) 1.29% 2.68% 1.51% 4.38% Notes: (1) Source: the Iowa Department of Management. (2) Includes tax increment finance (TIF) valuations used in the following amounts: January 1: TIF Valuation... $239,682,054 $71,160,708 $270,859,009 $276,880,289 $293,865,782 (3) New Class as of January 1, 2015, previously reported as Commercial Property. (4) See PROPERTY TAX INFORMATION - Utility Property Tax Replacement herein. (5) Based on 2010 Taxable Valuation of $2,723,238,642 The remainder of this page was left blank intentionally. 19

22 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 For the January 1, 2015 levy year, the District s Taxable Valuation was comprised of approximately 67% residential, 25% commercial, 4% multi-residential, 2% industrial, and 2% utilities, agriculture and military exemption. Taxable ( Rollback ) Valuations for the District(1)(2) Fiscal Year: 2012/ / / / /17 Property Class Levy Year: Residential... $1,087,598,338 $1,155,718,217 $1,211,376,770 $1,267,754,958 $1,331,716,313 Agricultural... 20,531,152 21,342,675 21,898,445 22,378,749 21,981,324 Commercial ,062, ,428, ,526, ,002, ,277,404 Industrial... 38,726,020 43,553,390 44,943,938 43,111,512 43,340,004 Multi-residential(3) ,355,298 Railroads... 2,574,413 2,987,312 3,519,351 3,632,424 3,833,227 Utilities without Gas and Electric(4)... 8,945,426 8,637,599 7,684,203 6,670,692 6,018,004 Gas and Electric Utility(4)... 8,343,105 7,753,508 7,741,170 5,800,095 5,764,587 Less: Military Exemption... (3,822,528) (3,733,632) (3,659,552) (3,528,060) (3,381,752) Total... $1,777,958,386 $1,835,687,949 $1,882,031,310 $1,901,822,505 $1,973,904,409 Percent Change +(-) %(5) 3.25% 2.52% 1.05% 3.79% Notes: (1) Source: the Iowa Department of Management. (2) Includes tax increment finance (TIF) valuations used in the following amounts: January 1: TIF Valuation... $238,279,052 $69,938,785 $262,029,070 $255,379,885 $268,498,450 (3) New Class as of January 1, 2015, previously reported as Commercial Property. (4) See PROPERTY TAX INFORMATION - Utility Property Tax Replacement herein. (5) Based on 2010 Actual Valuation of $1,623,741,165. The following shows the trend in the District s tax extensions and collections. Tax Extensions and Collections(1) Levy Fiscal Amount Amount Percent Year Year Levied Collected(2) Collected $14,956,153 $14,950, % ,016,840 16,967, % ,807,718 17,804, % ,973,096 18,885, % ,611,619 19,620, % ,995,786 20,782, % ,853,489 22,720, % ,482,508 21,261, % ,243,908 21,081, % ,572, In Collection ---- Notes: (1) Source: the State of Iowa Department of Management and the District. Includes amounts for Utility Replacement. (2) Includes delinquent taxes. The remainder of this page was left blank intentionally. 20

23 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Principal Taxpayers(1) Levy Year 2015 Taxpayer Name Business/Service Taxable Valuation(2) Target Corporation... Warehouse... $ 69,138,954 College Square Realty LLC... Retail Mall... 18,652,455 Walmart... Retail Store... 12,208,455 Midland Tarkenton LLC... Retail Stores... 11,476,026 WB CF Associates Limited Partnership III... Apartment Complex and Commercial Property... 10,986,543 Scion UNI Investors LLC... Apartment Complex... 9,915,999 R and N Investment Properties LC... Apartment Complex and Commercial Property... 9,417,240 Martin Realty Company LLC... Warehouse... 8,648,640 Gold Falls Villa Apartments LLC... Apartment Complex... 7,731,588 Harvest Mallard Point Retirement... Retirement Community... 7,041,855 Total... $165,217,755 Ten Largest Taxpayers as Percent of District s 2015 Taxable Valuation ($3,185,619,469) % Notes: (1) Source: the County. (2) Every effort has been made to seek out and report the largest taxpayers. However, many of the taxpayers listed contain multiple parcels and it is possible that some parcels and their valuations have been overlooked. Levy Limits In addition to the General Fund, there are several other tax funds that the District can create and use for specific purposes. The property tax rates for the District from levy year 2011 through levy year 2015 are shown below: Property Tax Rates: Levy Years (1)(2) (Per $1,000 Actual Valuation) Fiscal Year: 2012/ / / / /17 Levy Year: The District: Operating... $ $ $ $ $ Management Voted PPEL Regular PPEL Debt Service Total District(2)... $ $ $ $ $ City of Cedar Falls... $ $ $ $ $ Black Hawk County Hawkeye Community College Other Total Tax Rate for City of Cedar Falls Resident... $ $ $ $ $ Notes: (1) Source: the Iowa Department of Management. (2) The Operating Fund rate is determined in large measure by the State of Iowa education funding. Tax Levy Procedures The Bonds are general obligations of the District, payable from and secured by a continuing ad valorem tax levied against all of the property valuation within the District. As part of the budgetary process each fiscal year, the District will have an obligation to request a debt service levy to be applied against all of the taxable property within the District. A failure on the part of the District to make a timely levy request or a levy request by the District that is inaccurate or is insufficient to make full payments of the debt service of the Bonds for a particular fiscal year may cause Bond holders to experience delay in the receipt of distributions of principal of and/or interest on 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 District and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. 21

24 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Notwithstanding the foregoing, Iowa Code section 76.2 provides when an Iowa political subdivision issues bonds, the governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditor(s) to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full. Utility Property Tax Replacement Property owned by entities involved primarily in the production, delivery, service and sale of electricity and natural gas ( Utilities ) pay a replacement tax based upon the delivery of energy by Utilities in lieu of property taxes. All replacement taxes are allocated among local taxing bodies by the State Department of Revenue 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. Utility properties paying the replacement tax are exempt from the levy of property tax by political subdivisions. In addition to the replacement tax, 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. By statute, the replacement tax collected by the State and allocated among local taxing bodies (including the District) shall be treated as property tax when received and shall be disposed of by the county treasurer as taxes on real estate. It is possible that the general obligation debt capacity of the District 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 District 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 District can issue or (ii) adversely affect the District 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. Less than 1% of the District s taxable value currently is utility property. 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 designated urban renewal projects which contribute to the urban redevelopment and economic development of the immediate area. There taxable valuation for this type of TIF district in the District for levy year 2015 was $268,498,450. 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 programming for new employees of 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 cost 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. There is no current valuation for this second type of TIF district. 22

25 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Legislation From time to time, legislative proposals are pending in Congress and the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described herein. It cannot be predicted whether or in what forms any of such proposals, either pending or that may be introduced, may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for taxes levied by the District or have an adverse impact on the future tax collections of the District. Purchasers of the Bonds should consult their tax advisors regarding any pending or proposed federal or state tax legislation. The opinions expressed by Bond Counsel are based upon existing legislation as of the date of issuance and delivery of the Bonds and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any pending federal or state tax legislation. 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 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 90%, (iii) creates a new property tax classification for multi-residential properties (apartments, nursing homes, assisted living facilities and certain other rental property) and assigns a declining rollback percentage to such properties for each 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. 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 for residential and agricultural properties to 3%, the gradual transition for multi-residential properties from 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 District s future property tax collections is uncertain and the District has not attempted to quantify the financial impact of the Act s provisions on the District s future operations. It has been projected by Moody s Investor Service that local governments in Iowa are likely to experience sizeable reductions in tax revenues collected 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. Notwithstanding any decrease in property tax revenues that may result from the Act, Iowa Code section 76.2 provides that when an Iowa political subdivision issues bonds, "[t]he governing authority of these political subdivisions before issuing bonds shall, by resolution, provide for the assessment of an annual levy upon all the taxable property in the political subdivision sufficient to pay the interest and principal of the bonds within a period named not exceeding twenty years. A certified copy of this resolution shall be filed with the county auditor or the auditors of the counties in which the political subdivision is located; and the filing shall make it a duty of the auditors to enter annually this levy for collection from the taxable property within the boundaries of the political subdivision until funds are realized to pay the bonds in full." From time to time, other legislative proposals may be considered by the Iowa General Assembly that would, if enacted, alter or amend one or more of the property tax matters described in this Official Statement. It cannot be predicted whether or in what forms any of such proposals may be enacted, and there can be no assurance that such proposals will not apply to valuation, assessment or levy procedures for the levy of taxes by the District. 1 US Public Finance Weekly Credit Outlook, May 30, 2013, Moody s Investors Service. 23

26 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 FINANCIAL INFORMATION Financial Reports The District s financial statements are audited annually by certified public accountants. The government-wide, proprietary and fiduciary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. The District s financial statements are prepared in conformity with accounting principles generally accepted in the United States of America as prescribed by the Governmental Accounting Standards Board. See APPENDIX A 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 are from the audited financial statements of the District, including the audited financial statements for the fiscal year ended June 30, 2016 (the 2016 Audit ). The 2016 Audit has been prepared by Carney, Alexander, Marold & Co., L.L.P, Certified Public Accountants, Waterloo, Iowa, (the Auditor ), and received by the Board. The District has not requested the Auditor to update information contained in the Excerpted Financial Information and the 2016 Audit; nor has the District requested that the Auditor consent to the use of the Excerpted Financial Information and the 2016 Audit in this Official Statement. The inclusion of the Excerpted Financial Information and the 2016 Audit in this Official Statement in and of itself is not intended to demonstrate the fiscal condition of the District since the date of the 2016 Audit. Questions or inquiries relating to financial information of the District since the date of the 2016 Audit should be directed to the District. 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 the District s 2016 Audit. The District approved a balance budget for fiscal year 2017; to date, revenues and expenditures are generally within budgeted amounts. The remainder of this page was left blank intentionally. 24

27 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Statement of Net Position Governmental Activities(1) Audited as of June ASSETS: Cash, Cash Equivalents and Pooled Investments... $ 27,555,273 $ 21,816,460 $ 27,210,447 $ 26,308,864 $ 25,490,614 Receivables: Property Taxes: Delinquent... 88, , , ,050 70,185 Succeeding Year... 20,762,101 22,859,605 21,397,573 21,279,885 22,502,591 Accounts ,956 1,126,726 1,213, , ,652 Accrued Interest... 5,505 6, ,996 1,874 Due From Other Governments ,003 1,091,354 1,152,640 1,338,109 1,117,023 Due From Other Funds... 24,637 24, , Inventories... 34,345 25,305 32,694 25,258 18,336 Prepaid Expenses , Capital Assets - Net of Accumulated Depreciation... 62,504,262 69,210,092 76,543,508 78,012,890 76,357,105 Total Assets... $112,193,827 $116,747,746 $127,669,966 $127,647,023 $126,121,715 DEFERRED OUTFLOWS OF RESOURCES: Pension Related Deferred Outflows of Income... (2) (2) (2) $ 4,300,072 $ 4,901,771 LIABILITIES: Accounts Payable... $ 2,698,566 $ 2,080,896 $ 2,319,942 $ 1,415,239 $ 1,211,179 Salaries and Benefits Payable... 4,610,246 4,752,399 4,857,210 5,409,949 5,547,522 Due To Other Governments... 40,701 98, , , ,219 Due to Other Funds , Accrued Interest Payable... 73,277 71,198 85,215 80,913 77,308 Deferred Revenue, Succeeding Year Property Tax.. 20,762,101 22,859,605 (2) (2) (2) Long-Term Liabilities: Portion Due Within One Year Compensated Absences , , , , ,631 Early Retirement... 15, Revenue Bonds , ,600 2,213,655 1,768,655 1,803,655 Portion Due After One Year Revenue Bonds... 18,613,750 17,750,150 24,171,990 22,403,335 20,599,680 Net Pension Liability ,749,772 22,471,549 Net OPEB Liability , , ,000 1,004,000 1,004,000 Total Liabilities... $ 48,487,201 $ 49,512,577 $ 34,779,719 $ 50,200,653 $ 53,133,743 DEFERRED INFLOWS OF RESOURCES: Unavailable Property Tax Revenue... (2) (2) $ 21,397,573 $ 21,279,885 $ 22,502,591 Pension Related Deferred Inflows of Resources... (2) (2) 0 6,769,252 1,870,221 Total Deferred Inflows of Resources... (2) (2) $ 21,397,573 $ 28,049,137 $ 24,372,812 NET POSITION: Net Investment in Capital Assets... $ 43,041,912 $ 50,596,342 $ 50,157,863 $ 53,840,900 $ 53,953,770 Restricted for: Categorical Funding , , , , ,317 Management Levy... 1,140,649 1,199,505 1,062, , ,300 Student Activities , , , , ,794 Other Special Revenue Purposes... 10,746 12,612 15,034 12,703 15,561 Physical Plant and Equipment Levy... 1,540,969 2,678,254 2,293,941 2,788,477 3,178,218 Permanent Fund... 1,470,196 1,431,679 1,442,686 1,431,337 0 Unrestricted... 15,290,835 10,149,030 14,983,084 (6,748,487) (5,864,029) Total Net Position... $ 63,706,626 $ 67,235,169 $ 71,492,674 $ 53,697,305 $ 53,516,931 Notes: (1) Source: Audited financial statements of the District for fiscal years June 30, (2) Format Change. The remainder of this page was left blank intentionally. 25

28 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Statement of Activities Governmental Activities(1) Audited Fiscal Year Ended June FUNCTION/PROGRAMS Governmental Activities: Instruction... $(24,135,913) $(24,204,182) $(24,020,371) $(25,492,328) $(26,881,019) Support Services... (11,950,990) (12,271,511) (14,575,365) (14,599,654) (15,445,391) Other Expenditures... (4,327,958) (4,687,509) (3,465,785) (3,568,203) (4,527,864) Total Governmental Activities... $(40,414,861) $(41,163,202) $(42,061,521) $(43,660,185) $(46,854,274) General Revenues: Property Taxes, Levied for General Purposes... $ 19,620,548 $ 20,782,040 $ 22,720,487 $ 21,261,265 $ 21,081,789 Statewide Sales, Services, and Use Tax... 3,672,221 4,468,108 4,227,019 4,613,875 4,682,586 Unrestricted State Grant... 19,179,555 19,222,595 19,137,954 21,403,150 22,211,914 Unrestricted Investment Earnings ,070 73, , , ,606 Other , , ,592 17,502 21,434 Special Items Transfer to Foundation (1,435,429) Total General Revenues... $ 42,697,658 $ 44,691,745 $ 46,319,026 $ 47,404,631 $ 46,673,900 Change in Net Position... 2,282,797 3,528,543 4,257,505 3,744,446 (180,374) Net Position Beginning of Year, As Restated... 61,423,829 63,706,626 67,235,169 49,952,859 53,697,305 Net Position End of Year... $ 63,706,626 $ 67,235,169 $ 71,492,674 $ 53,697,305 $ 53,516,931 Note: (1) Source: Audited financial statements of the District for fiscal years June 30, Balance Sheet(1) General Fund Audited as of June ASSETS: Cash, Cash Equivalents, and Pool Investments... $10,070,042 $10,273,529 $12,312,144 $12,136,625 $11,007,668 Receivables: Property Tax: Delinquent... 74, , , ,070 57,901 Succeeding Year... 17,270,099 19,343,087 17,767,588 17,569,371 18,716,953 Accounts ,838 1,126,350 1,213, , ,419 Accrued Interest... 1,408 1, Due from Other Governments , , , , ,934 Due from Other Funds... 24,637 24, , Inventories... 34,345 25,305 32,694 25,258 18,336 Prepaid Expenses , Total Assets... $28,297,102 $31,763,527 $31,910,614 $31,012,661 $30,712,546 LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES LIABILITIES: Accounts Payable... $ 994,111 $ 1,243,297 $ 1,153,607 $ 756,755 $ 750,345 Salaries and Benefits Payable... 4,610,246 4,752,399 4,857,210 5,409,949 5,547,522 Due to Other Governments... 40,701 98, , , ,219 Deferred Revenue: Succeeding Year Property Tax... 17,270,099 19,343,087 (2) (2) (2) Other... 6,008 0 (2) (2) (2) Total Liabilities... $22,921,165 $25,436,940 $ 6,124,078 $ 6,346,642 $ 6,512,086 DEFERRED INFLOWS OF RESOURCES: Unavailable Revenues: Succeeding Year Property Tax... (2) (2) $17,767,588 $17,569,371 $18,716,953 FUND BALANCES: Non Spendable... $ 34,345 $ 25,305 $ 32,694 $ 25,258 $ 18,336 Restricted , , , , ,317 Unassigned... 4,714,169 5,748,387 7,019,795 6,266,461 4,781,854 Total Fund Balances... $ 5,375,937 $ 6,326,587 $ 8,018,948 $ 7,096,648 $ 5,483,507 Total Liabilities, Deferred Inflows of Resources and Fund Balances... $28,297,102 $31,763,527 $31,910,614 $31,012,661 $30,712,546 Notes: (1) Source: Audited financial statements of the District for fiscal years June 30, (2) Format change. 26

29 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Statement of Revenues, Expenditures and Changes in Fund Balances(1) General Fund Audited Fiscal Year Ended June REVENUES: Local Sources... $19,336,641 $24,148,604 $26,157,384 $22,685,857 $20,771,334 State Sources... 24,624,453 24,484,799 25,329,974 27,330,406 28,304,906 Federal Sources... 2,361,058 1,790,920 2,181,954 2,081,670 2,153,972 Total Revenues... $46,322,152 $50,424,323 $53,669,312 $52,097,933 $51,230,212 EXPENDITURES: Instruction... $31,479,786 $35,186,135 $35,973,248 $36,674,337 $35,851,353 Support Services... 11,756,632 12,373,993 13,962,121 14,231,107 14,820,591 Other Expenditures... 1,925,667 1,929,402 2,052,254 2,132,291 2,192,843 Total Expenditures... $45,162,085 $49,489,530 $51,987,623 $53,037,735 $52,864,787 Excess (Deficiency) of Revenues Over (Under) Expenditures... $ 1,160,067 $ 934,793 $ 1,681,689 $ (939,802) $ (1,634,575) Other Financing Sources (Uses):... 8,184 15,857 10,672 17,502 21,434 Change in Fund Balance... $ 1,168,251 $ 950,650 $ 1,692,361 $ (922,300) $ (1,613,141) Fund Balances Beginning of Year... 4,207,686 5,375,937 6,326,587 8,018,948 7,096,648 Fund Balances End of Year... $ 5,375,937 $ 6,326,587 $ 8,018,948 $ 7,096,648 $ 5,483,507 Note: (1) Source: Audited financial statements for the District for June 30, Pensions EMPLOYEE RETIREMENT AND OTHER POST EMPLOYMENT BENEFIT OBLIGATIONS The District also contributes to the Iowa Public Employees Retirement System ( IPERS ), which is a cost-sharing multiple-employer 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 seven years of service or after attaining age 65. IPERS plan members are required to contribute a percentage of their annual salary, in addition to the District being required to make annual contributions to IPERS. Contribution amounts are set by State statute. The District s share is payable from the applicable funds of the District. All contributions are on a current basis. See APPENDIX A Note 7 for additional information on IPERS. The following table sets forth the contributions made by the District and employees to IPERS for the period indicated. The District has always made their full statutorily required contributions to IPERS. The District cannot predict the levels of funding that will be required in the future. % of Payroll % of Payroll Fiscal Year Paid by the District Paid by Employee % 5.95% % 5.95% % 5.95% % 5.95% % 5.95% The IPERS fund is administered by the IPERS Board 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 Actuarial Valuation Report of IPERS for fiscal years noted below (the IPERS Reports ). A complete copy of the Reports can be obtained by visiting IPERS website at: or by writing to IPERS at P.O. Box 9117, Des Moines, Iowa

30 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Unfunded Actuarial Funded Ratio UAAL as a Fiscal Accrued Liability (Actuarial Percentage of Covered Year Ending Actuarial Value Actuarial Accrued (Actuarial Value) Value) Covered Payroll (Actuarial June 30 of Assets [a] Liability [b] [b]-[a] [a]/[b] Payroll [c] Value) {[b-a]/[c]} $23,530,094,461 $29,446,197,486 $5,916,103, % $6,786,158, % ,711,096,187 30,498,342,320 5,787,246, % 6,880,131, % ,460,428,085 32,004,456,088 5,544,028, %` 7,099,277, % ,915,379,103 33,370,318,731 5,454,939, % 7,326,348, % ,033,696,587 34,619,749,147 5,586,052, % 7,556,515, % Source: IPERS Reports. According to IPERS, the market value investment 1-year return on program assets is as follows: Fiscal Year Ended Investment June 30 Return % % % % % % Source: IPERS Reports Bond Counsel, the District and the Municipal 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. Pursuant to GASB Statement No. 68, the District reported a liability of $22,930,152 as of June 30, 2016 for its proportionate share of the net pension liability for ( IPERS ). The net pension liability is the amount by which the total actuarial liability exceeds the pension plan s net assets or fiduciary net position (essentially the market value) available for paying benefits. The net pension liability was measured as of June 30, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, The District s proportion of the net pension liability was based on the District s share of contributions to the pension plan relative to the contributions of all IPERS participating employers. As of June 30, 2015, the District s collective proportion was %. For additional information, see the District s Audited Financial Statements for Fiscal Year Ending June 30, 2016 in APPENDIX A. Other Post-Employment Benefits (OPEB) 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 District 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. As of July 1, 2014, the most recent valuation date for the period July 1, 2015 through June 30, 2016, the actuarial accrued liability was $2,034,000, with no actuarial value of assets, resulting in an unfunded actuarial accrued liability (UAAL) of $2,034,000. The covered payroll (annual payroll of active employees covered by the plan) was approximately $30,760,000 and the ratio of the UAAL to covered payroll was 6.619%. As of June 30, 2016, there were no trust fund assets. As of the July 1, 2014 actuarial valuation date, the unit credit actuarial cost method was used. See APPENDIX A Notes (7) and (8) herein for further discussion of the District s employee retirement benefit obligations. 28

31 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 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 District shall cause books (the Bond Register ) for the registration and for the transfer of the Bonds to be kept at the principal office maintained for the purpose by the Bond Registrar in Des Moines, Iowa. The District will authorize to be prepared, and the Bond Registrar shall keep custody of, multiple bond blanks executed by the District 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 maintained for the purpose by the Bond Registrar, duly endorsed by, or accompanied by a written instrument or instruments of transfer in form satisfactory to the Bond Registrar and duly executed by the registered owner or such owner s attorney duly authorized in writing, the District shall execute and the Bond 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 District of any fully registered Bond shall constitute full and due authorization of such Bond, and the Bond 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 Bond Registrar shall not exceed the authorized principal amount of Bonds for such maturity less Bonds previously paid. The Bond Registrar shall not be required to transfer or exchange any Bond following the close of business on the fifteenth day of the month next preceding an interest payment date on such bond (known as the record date), 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 District or the Bond 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 except in the case of the issuance of a Bond or Bonds for the unredeemed portion of a bond surrendered for redemption. 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 District 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. 29

32 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Subject to the District s compliance with the above-referenced covenants, under present law, in the opinion of Bond Counsel, 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. The interest on the Bonds is not exempt from present Iowa income taxes. Ownership of the Bonds may result in other state and local tax consequences to certain taxpayers. Bond Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Bonds. Prospective purchasers of the Bonds should consult their tax advisors regarding the applicability of any such state and local taxes. NOT Qualified Tax Exemption Obligations Code. The District will NOT designate the Bonds as qualified tax-exempt obligations under Section 265(b) (3) (B) of the Tax Accounting Treatment of Discount and Premium on Certain 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 herein covered by the opinion and with respect to the various state tax consequences of an investment in Bonds. 30

33 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 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 District 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 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 opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation, regulatory initiatives or litigation. Enforcement There is no bond trustee or similar person to monitor or enforce the terms of the Bond 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 District and certain other public officials to perform the terms of the resolution for the Bonds) may have to be enforced from year to year. 31

34 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 The owners of the Bonds cannot foreclose on property within the boundaries of the District 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 District 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. Holders of the Bonds shall have and possess all the rights of action and remedies afforded by the common law, the Constitution and statutes of the State of Iowa and of the United States of America for the enforcement of payment of the Bonds, including, but not limited to, the right to a proceeding in law or in equity by suit, action or mandamus to enforce and compel performance of the duties required by Iowa law and the Resolution authorizing issuance of the Bonds (the Bond Resolution ). The practical realization of any rights upon any default will depend upon the exercise of various remedies specified in the Bond Resolution. The remedies available to the owners of the Bonds upon an event of default under the Bond Resolution, in certain respects, may require judicial action, which is often subject to discretion and delay. Under existing law, including specifically the federal bankruptcy code, certain of the remedies specified in the Bond Resolution may not be readily available or may be limited. A court may decide not to order the specific performance of the covenants contained in these documents. The legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by general principles of equity and public policy and by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. No representation is made, and no assurance is given, that the enforcement of any remedies with respect to such assets will result in sufficient funds to pay all amounts due under the Bond Resolution, including principal of and interest on the Bonds. Opinion Bond Counsel s opinion is not a guarantee of a result, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the District 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 C for a draft form of legal opinion for the Bonds. Bond Counsel Review Bond Counsel has approved the language included in this TAX MATTERS Section, but has not otherwise participated in the preparation of this Preliminary Official Statement and will not pass upon its accuracy, completeness or sufficiency. Bond Counsel has not examined, nor attempted to examine or verify, any of the financial or statistical statements or data contained in this Preliminary Official Statement, and will express no opinion with respect thereto. ALL POTENTIAL PURCHASERS OF THE BONDS SHOULD CONSULT WITH THEIR TAX ADVISORS WITH RESPECT TO FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF OWNERSHIP OF THE BONDS (INCLUDING BUT NOT LIMITED TO THOSE LISTED ABOVE). 32

35 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 CONTINUING DISCLOSURE For the purpose of complying with Rule 15c2-12 of the Securities Exchange Commission, as amended and interpreted from time to time (the Rule ), the District will covenant and agree, for the benefit of the registered holders or beneficial owners from time to time of the outstanding Bonds to provide reports of specified information and notice of the occurrence of certain events, as hereinafter described (the Disclosure Covenants ). The information to be provided on an annual basis, and the events as to which notice is to be given, is set forth in APPENDIX D Form of Continuing Disclosure Certificate. This covenant is being made by the District to assist the Underwriter(s) in complying with the Rule. Breach of the Disclosure Covenants will not constitute a default or an Event of Default under the Bonds or Resolution, respectively. A broker or dealer is to consider a known breach of the Disclosure Covenants, however, before recommending the purchase or sale of the Bonds in the secondary market. Thus, a failure on the part of the District to observe the Disclosure Covenants may adversely affect the transferability and liquidity of the Bonds and their market price. Pursuant to the Rule, the District has complied with its continuing disclosure covenants in all material respects during the previous five (5) years; except the Issuer did not timely file its Annual Financial Information and Operating Data or its audited financial statements for fiscal year ending June 30, 2011 ( FY2011 ) and the District did not timely file its audited financial statements for fiscal year ending June 30, 2012 ( FY2012 ). The District did not file a notice that the audit would be filed when available nor did the District file unaudited financial information for FY2011 and FY2012. The District filed its audited financial statements for FY2011 in February, 2012, and filed its audited financial statements for FY2012 in March, 2013 therefore the District did not file unaudited financial statements for either of those fiscal years. The District filed a Notice of failure to file on January 23, 2017 for those same fiscal years. For fiscal year ending June 30, 2015 ( FY2015 ), although the District timely filed unaudited financial statements (and then filed audited financial statements in February, 2016), the District failed to file a notice that the audited financial statements would be filed when available for FY2015. A Failure to file such notice was filed on January 23, Bond Counsel expresses no opinion as to whether the Undertaking complies with the requirements of Section (b)(5) of the Rule. OPTIONAL REDEMPTION Bonds due June 1, inclusive, are not subject to optional redemption. Bonds due June 1, , inclusive, are callable in whole or in part on any date on or after June 1, 2026, at a price of par and accrued interest. If less than all the Bonds are called, they shall be redeemed in such principal amounts and from such maturities as determined by the District and within any maturity by lot. The Bond Registrar will give written notice of redemption, identifying the Bonds (or portions thereof) to be redeemed, by mailing a copy of the redemption notice by first class mail not less than thirty (30) days nor more than sixty (60) 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 Bond Registrar. Unless moneys sufficient to pay the redemption price of the Bonds to be redeemed are received by the Bond Registrar prior to the giving of such notice of redemption, such notice may, at the option of the District, state that said redemption will be conditional upon the receipt of such moneys by the Bond Registrar on or prior to the date fixed for redemption. If such moneys are not received, such notice will be of no force and effect, the District will not redeem such Bonds, and the Bond Registrar will give notice, in the same manner in which the notice of redemption has been given, that such moneys were not so received and that such Bonds will not be redeemed. Otherwise, prior to any redemption date, the District will deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on the date. 33

36 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 Subject to the provisions for a conditional redemption described above, notice of redemption having been given as described above and in the Bond Resolution, the Bonds or portions of Bonds so to be redeemed will, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the District shall default in the payment of the redemption price) such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds will be paid by the Bond Registrar at the redemption price. 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 District taken with respect to the issuance or sale thereof. There is no litigation now pending, or to the knowledge of the District, threatened against the District that is expected to materially impact the financial condition of the District. 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 participated in the preparation of this Official Statement except for guidance concerning the sections regarding TAX MATTERS, and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify any of the financial or statistical statements, or data contained in this Official Statement, and will express no opinion with respect thereto. The FORM OF LEGAL OPINION as set out in APPENDIX C to this Official Statement, will be delivered at closing. The legal opinion to be delivered concurrently with the delivery of the Bonds expresses the professional judgment of the attorneys rendering the opinion as to legal issues expressly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of the result indicated by that expression of professional judgment, or of the transaction on which the opinion is rendered, or of the future performance of parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. In addition, the enforceability of the rights and remedies of owners of the Bonds may be subject to limitation as set forth in the Bond Counsel s opinion. The opinion will state, in part, that the obligation of the District 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, and to the exercise of judicial discretion in appropriate cases. 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 District, 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 and the 2016 Audit shown in APPENDIX A. This Official Statement is not to be construed as a contract or agreement amongst the District, the Underwriter, or the holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as opinions and not as representations of fact. The information and expressions of opinions contained herein are subject to change without notice and neither the delivery of this Official Statement or the sale of the Bonds made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the District since the date hereof. The information contained in this Official Statement is not guaranteed. 34

37 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 INVESTMENT RATINGS The District has supplied certain information and material concerning the Bonds and the District to the rating services shown on the cover page, including certain information and materials which may not have been included in this Official Statement, as part of its application for investment ratings on the Bonds. Ratings reflect only the views of the rating agencies assigning such ratings and an explanation of the significance of such ratings may be obtained from such rating agencies. Generally, such rating services base their ratings on such information and material, and also on such investigations, studies and assumptions that they may undertake independently. There is no assurance that such ratings will continue for any given period of time or that it may not be lowered or withdrawn entirely by such rating services if, in their 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 Bonds. An explanation of the significance of the investment ratings may be obtained from the rating agencies: Moody s Investors Service, 7 World Trade Center at 250 Greenwich Street, New York, New York 10007, telephone and Standard & Poor s Corporation, 55 Water Street, New York, New York 10041, telephone UNDERWRITING The Bonds were offered for sale by the District at a public, competitive sale on Tuesday, February 7, The best bid submitted at the sale was submitted by (the Underwriter ). The District awarded the contract for sale of the Bonds to the Underwriter at a price of $ (reflecting the par amount of $, plus a reoffering premium of $, and less an Underwriter s discount of $ ). The Underwriter has represented to the District that the Bonds have been subsequently re-offered to the public initially at the yields or prices set forth in the on the cover of the Final Official Statement. MUNICIPAL ADVISOR The District has engaged Speer Financial, Inc. as municipal advisor (the Municipal Advisor ) in connection with the issuance and sale of the Bonds. The Municipal Advisor is a Registered Municipal Advisor in accordance with the rules of the MSRB. The Municipal Advisor will not participate in the underwriting of the Bonds. The financial information included in the Official Statement has been compiled by the Municipal Advisor. Such information does not purport to be a review, audit or certified forecast of future events and may not conform with accounting principles applicable to compilations of financial information. The Municipal Advisor is not a firm of certified public accountants and does not serve in that capacity or provide accounting services in connection with the Bonds. The Municipal 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 Municipal Advisor obligated by the District s continuing disclosure undertaking. The remainder of this page was left blank intentionally. 35

38 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 CERTIFICATION We have examined this Official Statement dated January 24, 2017 for the $32,000,000* General Obligation School Bonds, Series 2017, and to the best of our knowledge, information and belief believe it to be true and correct and will provide to the purchaser of the Bonds at the time of delivery a certificate confirming to the purchaser that to the best of our knowledge and belief 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/ DOUGLAS J. NEFZGER /s/ JOYCE COIL Director of Business Affairs Board of Education President Cedar Falls Community School District Cedar Falls Community School District Black Hawk County, Iowa Black Hawk County, Iowa *Subject to change. 36

39 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 APPENDIX A CEDAR FALLS COMMUNITY SCHOOL DISTRICT BLACK HAWK COUNTY, IOWA FISCAL YEAR 2016 AUDITED FINANCIAL STATEMENTS

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129 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 APPENDIX B DESCRIBING BOOK-ENTRY ONLY ISSUANCE 1. The Depository Trust Company ( DTC ), New York, New York, will act as securities depository for the Bonds (the Securities ). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fullyregistered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. 2. DTC, the world s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a banking organization within the meaning of the New York Banking Law, a member of the Federal Reserve System, a clearing corporation within the meaning of the New York Uniform Commercial Code, and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-u.s. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC s participants ( Direct Participants ) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ( DTCC ). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-u.s. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( Indirect Participants ). DTC has a Standard & Poor s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC s records. The ownership interest of each actual purchaser of each Security ( Beneficial Owner ) is in turn to be recorded on the Direct and Indirect Participants records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. B-1

130 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC s practice is to credit Direct Participants accounts upon DTC s receipt of funds and corresponding detail information from the District or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in street name, and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to any Tender/Remarketing Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant s interest in the Securities, on DTC s records, to any Tender/Remarketing Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC s records and followed by a bookentry credit of tendered Securities to any Tender/Remarketing Agent s DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the District or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. The District may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC s book-entry system has been obtained from sources that the District believes to be reliable, but the District takes no responsibility for the accuracy thereof. B-2

131 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 APPENDIX C PROPOSED FORM OF OPINION OF BOND COUNSEL C-1

132 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 C-2

133 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 APPENDIX D DRAFT FORM OF CONTINUING DISCLOSURE CERTIFICATE D-1

134 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 D-2

135 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 D-3

136 Cedar Falls Community School District, Black Hawk County, Iowa $32,000,000* General Obligation School Bonds, Series 2017 D-4