Agenda - Council - 10/12/1993 - Laserfiche WebLink

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Security and Financing In addition to the general obligation pledge of the City, tax increment income generated within the City's Development District No. 1 (the "District"), as originally pledged to the 1987 Bonds, will be pledged to the Bonds and will be used for payment of debt service on the Bonds following the call date of the 1987 Bonds. The City does not expect to levy taxes for this Issue. Future Financing The City does not anticipate the need to issue additional debt for at least the next 90 days. Litigation The City is not aware of any threatened or pending litigation affecting the validity of the Bonds or the City's ability to meet its financial obligations. Legality The Bonds are subject to approval as to certain matters by Holmes & Graven, Chartered, of Minneapolis, Minnesota as Bond Counsel. Bond Counsel has not participated in the preparation of this Official Statement, except for the following 'q'ax Exemption" section, and will not pass upon its accuracy, completeness, or sufficiency. Bond Counsel has not examined nor attempted to examine or verify, any of the financial or statistical statements, or data contained in this Official Statement and will express no opinion with respect thereto. A legal opinion in substantially the form set out as Appendix I to this Official Statement, will be delivered at closing. Tax Exemption In the opinion of Bond Counsel, under existing statutes, regulations, rulings and decisions, interest on the Bonds is not includable in the "gross income" of the owners thereof for purposes of federal income taxation and is not includable in net taxable income of individuals, estates or trusts for purposes of State of Minnesota income taxation, but is subject to State of Minnesota franchise taxes measured by income that are imposed upon corporations and financial institutions. Noncompliance following the issuance of the Bonds with certain requirements of the Internal Revenue Code of 1986, as amended, (the "Code") and covenants of the bond resolution may result in the inclusion of interest on the Bonds in gross income (for federal tax purposes) and net taxable income for State of Minnesota tax purposes of the owners thereof. No provision has been made for redemption of the Bonds, or for an increase in the interest rate on the Bonds, in the event that interest on the Bonds becomes subject to United States or State of Minnesota income taxation. The Code imposes an alternative minimum tax with respect to individuals and corporations on alternative minimum taxable income. Interest on the Bonds will not be treated as a preference item in calculating alternative minimum taxable income. The Code provides, however, that for taxable years beginning after 1989, a portion of the adjusted current earnings of a corporation not otherwise included in the minimum tax base would be included for purposes of calculating the alternative minimum tax that may be imposed with respect to corporations. Adjusted current earnings include income received that is otherwise exempt from taxation such as interest on the Bonds. 2