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2. Source of Funds and Security <br />The City is entering into the installment purchase <br />contract with the EDA pursuant to Minnesota <br />Statutes, Section 465.71. The installment <br />purchase contract is a binding obligation of the <br />City payable from general sources including taxes, <br />and its payment is not limited to a specific fund <br />or specific source of revenues. The City has <br />covenanted in the installment purchase contract <br />to levy general ad valorem taxes on all taxable <br />property in the City if necessary to have <br />sufficient funds to pay installment payments. The <br />installment purchase contract is not, however, a <br />general obligation of the City within the meaning <br />of Minnesota Statutes, Section 475.51, Subdivision <br />10, and accordingly no tax levy over the Lerni of <br />the installment contract has been made under <br />Minnesota Statutes, Section 475.61. <br />Said Section 465.71 provides that the obligation <br />created by an installment purchase contract shall <br />not constitute debt under any other statutory <br />provision. <br />3. Bond Issue Details <br />The EDA will issue approximately $1,080,000 in <br />public project revenue bonds. The bonds would <br />have a fifteen year maturity and be retired in the <br />year 2005, see Exhibit G, Bond Cash Flow Analysis. <br />E. Development Contracts <br />Subject to all required public notices and hearings, <br />the property in the Redevelopment Area will be sold to <br />the Developer or assistance will be provided pursuant <br />to a development contract under which, among other <br />things, the Developer will be required to complete a <br />project of at least a minimum cost and having a <br />specified minimum Assessor's Market Value; to complete <br />the work by a specified date pursuant to plans and <br />specifications submitted to and building permits issued <br />by or on behalf of the EDA, and pursuant to and in <br />accordance will all other applicable governmental . <br />regulations; and to demonstrate its financial <br />capability for so doing. No property will be acquired <br />for private redevelopment within the Redevelopment Area <br />prior to the EDA and developer entering into a <br />development contract. <br />Page 35 <br />