using (var serverManager = new ServerManager())
{
    ApplicationPool applicationPool = serverManager.ApplicationPools.Add(name);
    applicationPool.AutoStart = true;
    applicationPool.ManagedPipelineMode = ManagedPipelineMode.Integrated;
    applicationPool.ManagedRuntimeVersion = "v4.0";

    // START ISSUE:
    applicationPool.ProcessModel.IdentityType = ProcessModelIdentityType.SpecificUser;
    applicationPool.ProcessModel.UserName = username;
    applicationPool.ProcessModel.Password = userPassword;
    applicationPool.ProcessModel["idleTimeoutAction"] = 1;
    // END ISSUE

    serverManager.CommitChanges();
}