Resolutions-2018-005

Sources and Uses of Funds Following are the sources and uses of funds in connection with the issuance of the Bonds. Sources of Funds <table> <tr><th>Par Amount of Bonds</th><td>$ 1,000,000</td></tr> <tr><th>Total Sources of Funds:</th><td>$ 1,000,000</td></tr> </table> Uses of Funds <table> <tr><th>Deposit to Project Fund</th><td>$ 975,000</td></tr> <tr><th>Costs of Issuance/Underwriter’s Discount</th><td>24,750</td></tr> <tr><th>Rounding Amount</th><td>250</td></tr> <tr><th>Total Uses of Funds:</th><td>$ 1,000,000</td></tr> </table> BONDHOLDERS’ RISKS Purchase of the Bonds involves risks to the purchaser which should be considered prior to any purchase of the Bonds. This section discusses some of these risks, but it is not intended to be a comprehensive listing of all risks associated with purchasing and owning the Bonds. Right of Nonappropriation: Although the City has represented its present intention to appropriate funds sufficient to pay principal of and interest on the Bonds in future fiscal years, the City has no continuing obligation to appropriate money for the payment of interest on and principal of the Bonds. In the event that funds are not budgeted and appropriated by the City in any fiscal year in an amount sufficient to meet the payments of interest and principal due on the Bonds, the City's obligation to make payments of interest and principal thereon 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 nonappropriation event, the City 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. Limited Obligations: The obligations of the Issuer to pay principal of and interest on the Bonds are general obligations of the Issuer payable from debt service tax revenues and other amounts lawfully available all to the extent appropriated by the City Council in a fiscal year and subject to the right of the City Council not to appropriate any debt service tax revenues or other amounts lawfully available in any fiscal year. In the event of non-appropriation 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. Changes in Composition of City Council: All of the members of the City Council are elected to staggered four-year terms of office. It is possible that, over time, the composition of the City Council could change. Such a change could impact the City’s willingness to appropriate funds to pay the principal of and interest on the Bonds, particularly if the newly elected council individuals are less supportive of the purpose for which the Bonds are being issued. Bonds are NOT a Continuing Obligation of the City: The Bonds do not constitute a continuing obligation of the City in any fiscal year beyond the fiscal year for which funds have been appropriated for the payment of the