I-1 - Preliminary Official Statement - UR Loan Agreement

On July 29, 2015, the City issued $4,430,000 of general obligation corporate purpose bonds to provide funds for various improvement projects and land acquisition. The bonds bear interest rates ranging from 2.00% to 3.40% per annum and mature on June 1, 2028. During the year ended June 30, 2019, the City paid principal of $315,000 and interest of $101,605 on the bonds. The outstanding principal balance at June 30, 2019 was $3,235,000. On December 20, 2017, the City issued $5,140,000 of general obligation corporate purpose bonds to provide funds for various improvement projects and land acquisition. The bonds bear interest rates ranging from 3.00% to 3.15% per annum and mature on June 1, 2033. During the year ended June 30, 2019, the City paid principal of $275,000 and interest of $154,830 on the bonds. The outstanding principal balance at June 30, 2019 was $4,865,000. On April 4, 2018, the City issued $1,100,000 of general obligation corporate purpose bonds to provide funds for acquisition of a fire truck for use by the municipal fire department. The bonds bear interest rates of 4.00% per annum and mature on June 1, 2038. During the year ended June 30, 2019, the City paid principal of $30,000 and interest of $50,967 on the bonds. The outstanding principal balance at June 30, 2019 was $1,070,000. Revenue Bonds On May 11, 2018, the City entered into a loan agreement with the Iowa Finance Authority (IFA) and the Iowa Department of Natural Resources for the issuance of sewer revenue bonds of up to $6,754,000 with interest at 1.75% per annum. The agreement also requires the City to annually pay a .25% servicing fee on the outstanding principal balance. The bonds were issued pursuant to the provisions of Chapter 384.24A to finance construction of certain wastewater treatment facilities. The City will draw down funds from the IFA upon request to reimburse the City for costs as they are incurred. During fiscal year 2019, the City drew down $3,672,754 on the bond. At June 30, 2019, the City had drawn down $5,338,261 of the authorized amount. An initiation fee of $33,770 (0.5% of the authorized borrowing for the sewer revenue bonds) was charged by the IFA. The initiation fee was withheld from the first proceeds of the sewer revenue bonds drawn by the City during the year ended June 30, 2018. A final repayment schedule has not yet been adopted. During the year ended June 30, 2019, the City paid principal of $268,000 and interest of $75,297 on the bonds under a preliminary repayment schedule. On September 30, 2016, the City entered into a loan agreement with the Iowa Finance Authority (IFA) and the Iowa Department of Natural Resources for the issuance of sewer revenue bonds up to $2,296,000 with interest at 1.75% per annum. The agreement also requires the City to annually pay a .25% servicing fee on the outstanding principal balance. The bonds were issued pursuant to the provisions of Chapter 384.24A to finance construction of certain wastewater treatment facilities. The City will draw down funds from the IFA upon request to reimburse the City for costs as they are incurred. During fiscal year 2019, the City drew down $1,007 on the bond. At June 30, 2019, the City had drawn down $2,159,901 of the authorized amount. An initiation fee of $11,480 (0.5% of the authorized borrowing for the water revenue bonds) was charged by the IFA. The initiation fee was withheld from the first proceeds of the sewer revenue bonds drawn by the City during the year ended June 30, 2017. A final repayment schedule has not yet been adopted. During the year ended June 30, 2019, the City paid principal of $96,000 and interest of $41,325 on the bonds under a preliminary repayment schedule. 26