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<br />~~'''~'''''''''~~,~,~''''~~ <br /> <br />u,~~ <br /> <br />,",'~,~ <br /> <br />,~",",~"~~~- <br /> <br />"""'~ <br /> <br />Related Considerations: <br /> <br />. Bank Qualified - because total tax-exempt debt issued by the City in calendar year 2009 is <br />expected to be less than $30.0M, the Bonds will be designated as "bank qualified" <br />obligations pursuant to Federal Tax Law. The impact of this designation IT1:ay result in <br />slightly lower interest rates since banking institutions will be interested in purchasing <br />the Bonds. We have adjusted the estimated interest rates accordingly. <br /> <br />. Arbitrage Compliance - <br /> <br />o Project / Construction Fund - All tax exempt issues are subject to federal rebate <br />requirements which require all arbitrage earned to be rebated to the U.S. <br />Treasury. A rebate exemption the City expects to qualify for is the "small issuer <br />exemption" because the City expects to issue less than $5.0M of tax exempt <br />bonds in calendar year. <br /> <br />o Debt Service Fund - The City must maintain a bona fide debt service fund for <br />the certificates or be subject to yield restriction in the debt service fund. A bona <br />fide debt service fund involves an equal matching of revenues to debt service <br />expense with a balance forward permitted equal to the greater of the investment <br />earnings in the fund during that year or 1/12 of the debt service of that year. <br /> <br />The City should become familiar with the various Arbitrage Compliance requirements <br />for this bond issue. The Resolution explains the requirements in greater detail. We are <br />also available to assist the City in meeting these requirements. <br /> <br />. Book Entry - The Bonds will be global book entry with a bank designated as the payin;g agent. <br />As "paperless" certificates, you will avoid the cost of bond printing and annual registrar <br />charges. The Paying Agent will invoice you for the interest semiannually and on an <br />annual basis for the principal coming due. You will be charged only for paying, <br />agent/transfer agent services provided by the bank. This cost of services has been <br />capitalized into the bond issue. <br /> <br />. Continuing Disclosure - Because the City's outstanding debt exceeds $IO.OM, it is subject <br />to the Securities and Exchange Commission's continuing disclosure requirements. <br />Northland Securities is prepared to assist the City in this capacity. <br /> <br />~ <br /> <br />,,'.. '.,-.~ <br /> <br />.-.- <br /> <br />Page 4 <br /> <br />NORTHLANDOSECU RITIES <br /> <br />- <br /> <br />- .-- .,-, <br /> <br />-",-,,---- <br />