I-1 - Preliminary Official Statement Series 2021A Refunding

funds were appropriated. Upon the occurrence of any such nonappropriation, the Issuer shall not be obligated to make payment from any source of any amounts in respect of such debt service on the Bonds beyond those amounts for which an appropriation has previously been made, and the Issuer shall not be liable to the Bondholders for any remaining amounts due under the Bonds or for any costs, damages (including but not limited to consequential damages) or expenses incurred by the Bondholders as a result of the exercise by the Issuer of the foregoing right of nonappropriation. In addition, the Issuer has the ability to issue additional obligations payable from Debt Service Tax Revenues up to the Iowa constitutional debt limitation (and in excess of that debt limitation if those additional obligations are annual appropriation obligations). As a result, if the tax burden on Issuer taxpayers were too great because of the appropriation for all outstanding obligations payable from Debt Service Tax Revenues, the City Council could decide not to appropriate monies to pay principal of and interest on the Bonds. Tax Increment Revenues (Subject to Right of Annual Appropriation) While not pledged to bondholders, “tax increment revenues” (“TIF Revenues”) are used to describe the portion of real estate taxes levied and collected within an urban renewal area which is permitted by Chapter 403 of the Code of Iowa, 2019, as amended (the “URA Act”) to be specially allocated to further the development of a designated urban renewal area. An urban renewal area is a geographic area established by the Issuer pursuant to the URA Act for the purpose, among other things, of economic development. In general, TIF Revenues from a parcel are determined annually by multiplying the aggregate of all local tax rates, excluding the portion of the tax rates for debt service, applicable to the assessed value of all taxable property within an urban renewal area, by the aggregate difference (the “Captured Assessed Valuations”) between the current assessed value and original assessed value in an urban renewal area. In general, the original assessed value reflects the assessed value of each parcel on the date an urban renewal area was established. Johnson County (the “County”) collects the real estate taxes and distributes the TIF Revenues to the Issuer to use for purposes permitted by the URA Act, including repayment of tax increment obligations. TIF Revenues are generally distributed by the County to the Issuer in the months of October and April. The Issuer has no obligation to appropriate money for the payment of principal of and interest on the Bonds. In the event that funds are not budgeted and appropriated by the City Council in any fiscal year in an amount sufficient to meet the payments of principal of and interest on the Bonds, the Issuer’s obligation to make payments of interest and principal terminates without penalty, and becomes null and void on the last day of the fiscal year for which the necessary funds were appropriated. Upon the occurrence of any such non- appropriation, the Issuer is not obligated to make payment of any additional amounts in respect of principal of and interest on the Bonds beyond those funds which have been so appropriated. TIF REVENUES ARE AN AVAILABLE SOURCE OF PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE BONDS, BUT TIF REVENUES ARE NOT PLEDGED TO BONDHOLDERS. THE DECISION OF THE ISSUER TO APPROPRIATE FUNDS, INCLUDING TIF REVENUES, FOR EACH FISCAL YEAR, SHALL BE MADE IN ACCORDANCE WITH THE NORMAL PROCEDURES OF THE CITY COUNCIL. See “BONDHOLDERS’ RISKS” for a description of the right of non- appropriation reserved by the Issuer. THE ISSUER COULD ISSUE BONDS IN THE FUTURE THAT ARE PAYABLE FROM TIF REVENUES OR OTHER REVENUES LAWFULLY AVAILABLE TO THE ISSUER. THE ISSUER CAN LEGALLY APPROPRIATE AMOUNTS TO THE PAYMENT OF CERTAIN BONDS, IN WHOLE OR IN PART, WITHOUT APPROPRIATING AMOUNTS TO THE PAYMENT OF OTHER BONDS. Funds and Accounts The following is a summary of certain portions of the Resolution regarding the establishment of funds and accounts. This summary is not to be considered a full statement of the provisions of the Resolution and is qualified by reference to the Resolution, which will be adopted by the City Council upon sale of the Bonds. Bond Fund. The Resolution establishes a separate and special fund known as the City of Tiffin, Iowa, General Obligation Annual Appropriation Refunding Bonds, Series 2021A Bond Fund (the “Bond Fund”). There shall be deposited into the Bond Fund, if and when received, the following: (a) any Debt Service Tax Revenues appropriated by the Issuer for the payment of principal of and interest on the Bonds and (b) any other amounts appropriated by the Issuer from any other source, including TIF Revenues, for the payment of principal of and interest on the Bonds. Any funds deposited in the Bond Fund (when appropriated by the City Council) shall be used solely and only and are pledged to pay the principal of and interest on the Bonds when due, whether at maturity or upon mandatory or optional redemption. Debt Service Fund. Pursuant to the Resolution, the Issuer shall deposit Debt Service Tax Revenues, if and when collected, into a special account of the Debt Service Fund to be used solely and only for the payment of principal of and interest on the Bonds (when appropriated by the City Council), to be transferred for deposit into the Bond Fund to be used for such purpose. -3-