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130312234v1 City of Little Canada December 15, 2023 Page 2 Bonds directly to the Borrower. The Issuer is merely a conduit and the money and obligations flow only between the lender or trustee and the Borrower. The Bonds and the resolutions adopted by the Issuer will recite that the Bonds, if and when issued, will not to be payable from or charged upon any of the Issuer’s funds, other than the revenues received under the Loan Agreement and pledged to the payment of the Bonds, and the Issuer is not subject to any liability on the Bonds. No holder of the Bonds will ever have the right to compel any exercise by the Issuer of its taxing powers to pay any of the principal of the Bonds or the interest or premium thereon, or to enforce payment of the Bonds against any property of the Issuer except the interests of the Issuer in payments to be made by the Borrower under the Loan Agreement. The Bonds will not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the Issuer, except the interests of the Issuer in payments to be made by the Borrower under the Loan Agreement. The Bonds are not moral obligations on the part of the State or its political subdivisions, including the Issuer, and the Bonds will not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation. The issuance of the Bonds will not affect the Issuer’s credit rating on bonds it issues for municipal purposes. Multifamily housing development bonds are not applied against the City’s $10,000,000 calendar year-limit on bank-qualified bonds. Therefore, the City may issue the Bonds, while still maintaining its ability to issue up to $10,000,000 of bank-qualified bonds for itself or 501(c)(3) organizations in 2024. The City’s one-time issuer administration fee of ½ of 1% would be calculated based on the principal amount of the Bonds actually issued. The Bonds will be issued in accordance with Minnesota Statutes, Chapter 462C. If the Project is awarded an allocation by MMB, the Issuer must also hold a public hearing on a housing program related to the project and the financing. The next step is to adopt a resolution, which has been provided to the City by Taft Stettinius & Hollister LLP, that ratifies and affirms the resolution adopted in June regarding the Project, and authorizes staff to work with bond counsel to submit an application to Minnesota Management and Budget for allocation, which will occur before year-end. Please feel free to contact me or Dan Burns if you have any further questions or comments. Very truly yours, Catherine J. Courtney CJC dfb