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Economic Development Authority of the <br /> City of Ramsey, Minnesota <br />October 21, 1999 <br /> <br />(c) Bona Fide Debt Service Fund <br /> <br />(d) Economic Life <br /> <br />(e) Federal Reimbursement <br /> Regulations <br /> <br />11. Continuing Disclosure <br /> <br />12. Attachments <br /> <br /> The Authority must maintain a bona fide <br /> debt service fund for the Bonds or be <br /> subject to yield restriction. This requires <br /> restricting the investments held in the debt <br /> service fund to the yield on the Bonds and/or <br /> paying back excess investment earnings in <br /> the debt service fund to the federal <br /> government. A bona fide debt service fund <br /> is a fund for which there is an equal <br /> matching of revenue to debt service <br /> expense, with carry over permitted equal to <br /> the greater of the investment earnings in the <br /> fund during that year or 1/12 the debt <br /> service of that year. <br /> <br />The average life of the Bonds cannot <br />exceed 120% of the economic life of the <br />project to be financed. The economic life of <br />the facility exceeds 20 years. The average <br />life of the Bonds is 11.815 years, therefore, <br />the issue is within the economic life <br />requirements. <br /> <br />Federal reimbursement regulations require <br />the Authority to make a declaration, within <br />60 days of the actual payment, of its intent <br />to reimburse itself from expenses paid prior <br />to the receipt of bond proceeds. It is our <br />understanding the Authority has taken <br />whatever actions are necessary to comply <br />with the federal reimbursement regulations <br />in regards to the Bonds. Non-bond funds <br />can be used to repay expenditures made <br />prior to receipt of bond proceeds. <br /> <br />The Bonds are subject to continuing <br />disclosure requirements set forth by the <br />Securities and Exchange Commission. The <br />SEC rules require the City, as the "obligated <br />party," to undertake an annual update of <br />certain Official Statement information and <br />report any material events to the national <br />repositories. A more complete discussion of <br />continuing disclosure is contained in the <br />Continuing Disclosure Primer transmitted to <br />your finance staff under separate cover. <br />Springsted Incorporated offers a service to <br />assist the City with its continuing disclosure <br />under a separate contract. A contract for <br />this issue has been provided to City staff. <br /> <br />· Sources and Uses of Funds <br /> <br />· Debt Service Schedule <br /> <br />· Terms of Proposal <br /> <br />Page 3 <br /> <br /> <br />