Resolution - #03-06-138 - 06/10/2003

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Account when the Bonds and interest thereon are paid shall be used consistent with Mim~esota Statutes, Section 475.61, Subdivision 4. The moneys in the Debt Service Account shall be used solely to pay the principal of and interest on the Bonds or any other bonds hereafter issued and made payable from the Fund. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued, and (2) in addition to the above, in an amount not greater than the lesser of five percent (5%) of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Fund (or any other City account which will be sued to pay principal and interest to become due on the Bonds) in excess of amounts which under the applicable federal arbitrage regulations may be invested without regard as to yield shall not be invested in excess of the applicable yield restrictions imposed by the arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. In addition, the proceeds of the Bonds and money in the Fund shall not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the federal Internal Revenue Code of 1986, as amended (the "Code"). 16. Prior Bonds; Security; Covenants Relating to the Bonds. Until retirement of the Prior Bonds, all provisions theretofore made in the Prior Resolution for the security thereof shall be observed by the City and all of its officers and agents. (a) Tax Increments. The City hereby pledges and appropriates the Tax Increments to the Debt Service Account, which pledge and appropriation shall continue until the Bonds and any additional bonds payable from the Debt Service Account are paid or discharged. The City hereby expressly reserves the right to use the Tax Increments to finance costs set forth in the Plan not financed hereby or to finance costs of other projects to be undertaken from time to time within the Development District in accordance with the Development Program and the Plan, as may be fi'om time to time amended. (b) Coverage Test. The Tax Increments are such that if collected in full they, together with estimated collections of other revenues herein pledged for the payment of the Bonds, will produce at least five percent (5%) in excess of the amount needed to meet when due thc principal and interest payments on the Bonds, consequently no taxes are levied at the present time. (c) Future Tax Levies. On or before November 10 of each year, the Administrator shall certify to the County Auditor of Anoka County the amount of Tax Increments and any other funds appropriated to and then held in the Debt Service Account and the estimated collections of Tax Increments to be received in the 'next succeeding year. In the event that it is anticipated that the aggregate of said sums will not be sufficient to pay the principal and interest on the Bonds to become due in the first calendar year thereafter and the first six (6) months of the succeeding calendar year, the City Council shall pass a resolution requesting the County Auditor of Anoka 14