I-1 - Preliminary Official Statement Series 2021A Refunding

IN THE EVENT OF NONAPPROPRIATION BY THE ISSUER, THE ISSUER’S OBLIGATIONS UNDER THE BONDS SHALL TERMINATE AND BECOME NULL AND VOID ON THE LAST DAY OF THE FISCAL YEAR FOR WHICH NECESSARY FUNDS WERE APPROPRIATED AND IN NO EVENT SHALL SUCH OBLIGATIONS BE PAYABLE FROM OR BE RECOURSE AGAINST ANY PROPERTIES, ASSETS OR REVENUES OF THE ISSUER, THE STATE OF IOWA OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE OF IOWA AND THE BONDHOLDERS SHALL NOT HAVE ANY RECOURSE OR RIGHT OF ACTION AGAINST THE ISSUER, THE STATE OF IOWA OR ANY OTHER POLITICAL SUBDIVISION THEREOF ON ACCOUNT OF SUCH OBLIGATIONS OR ANY LIABILITIES, OF WHATSOEVER NATURE, ARISING IN CONNECTION THEREWITH. Registration of Securities Bond Counsel will render no opinion with respect to the applicability or inapplicability of the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”), to any Bonds subsequent to a nonappropriation. If a nonappropriation occurs, the obligations of the Issuer under the Bonds becomes null and void and there is no assurance that the Bonds may be transferred by a registered owner thereof without compliance with the registration provisions of the 1933 Act or the availability of an exemption therefrom. In addition, Bond Counsel will render no opinion as to the treatment for federal income tax purposes of any moneys received by a registered owner of the Bonds subsequent to a nonappropriation. There is no assurance that any moneys received by the registered owners of the Bonds subsequent to a nonappropriation will be excludable from gross income for purposes of federal income taxation. See “SECURITY AND SOURCE OF PAYMENT.” Additional Obligations Notwithstanding anything to the contrary contained within the Resolution, the Issuer retains the right at all times and for any reason to incur additional indebtedness the source of payment for which the Issuer can pledge and/or use Debt Service Tax Revenues. Similarly, the Issuer retains the right to pledge Debt Service Tax Revenues and TIF Revenues to future obligations absent the right of the City to annually appropriate Debt Service Tax Revenues to future indebtedness. In the event that the amounts which the Issuer is obligated to pay in a fiscal year exceed the Issuer’s Debt Service Tax Revenues or other revenues for such fiscal year, the Issuer may be obligated to, or could choose to, fund other services and obligations before making the payments due on any of the Bonds. Bonds are NOT a Continuing Obligation of the Issuer The Bonds do not constitute a continuing obligation of the Issuer in any fiscal year beyond the fiscal year for which funds have been appropriated for the payment of the Bonds. The Bonds shall not directly or indirectly obligate the Issuer to make any payments thereon during a fiscal year beyond the current fiscal year for which funds have been therefore appropriated by the City Council. Tax Levy Procedures The Bonds are general obligations of the Issuer subject to nonappropriation, payable from and secured by a continuing ad-valorem tax levied against all of the taxable property within the boundaries of the Issuer. As part of the budgetary process of the Issuer each fiscal year, if the Issuer determines to appropriate Debt Service Tax Revenues to pay principal of and interest on the Bonds, the Issuer will have an obligation to request a debt service levy to be applied against all of the taxable property within the boundaries of the Issuer to produce such Debt Service Tax Revenues. A failure on the part of the Issuer to make a timely levy request or a levy request by the Issuer that is inaccurate or is insufficient to make full payments of the debt service on 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. Changes in Property Taxation From time to time the Iowa General Assembly has altered the method of property taxation and could do so again. Any alteration in property taxation structure could affect property tax revenues available to pay the Bonds. Historically, the Iowa General Assembly has applied changes in property taxation structure on a prospective basis; however, there is no assurance that future changes in property taxation structure by the Iowa General Assembly will not be retroactive. It is impossible to predict the outcome of future property tax changes by the Iowa General Assembly or their potential impact on the Bonds and the security for the Bonds. Matters Relating to Enforceability of Agreements Subject to the Issuer’s non-appropriation rights, Bondholders 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, except that the Issuer cannot be compelled to budget and appropriate Debt Service Tax Revenues, TIF Revenues or other funds to the payment of principal of or interest on the Bonds. -5-