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<br /> Page 4 <br />(which are considered to be proceeds under the IRS regulations), and/or reserves. Under <br />certain circumstances any “excess earnings” will need to be paid to the IRS to maintain <br />the tax-exempt status of the Bonds. Any interest earnings on gross bond proceeds or <br />debt service funds should not be spent until it has been determined based on actual facts <br />that they are not “excess earnings” as defined by the IRS Code. <br />The arbitrage rules provide for an exception to the rebate requirements for an issuer that <br />issues $5 million or less of tax-exempt obligation in a calendar year. The City does not <br />expect to issue more than $5 million of tax-exempt obligations in 2020; therefore, the City <br />will qualify as a smaller issuer on the Bonds. <br />Regardless of whether the issue qualifies for an exemption from the rebate provisions, <br />yield restriction provisions will apply to Bond proceeds (including interest earnings) <br />unspent after three years and the debt service fund throughout the term of the Bonds. <br />These moneys should be monitored until the Bonds are retired. <br />Secondary disclosure requirements result from an SEC requirement that underwriters <br />provide ongoing disclosure information to investors. To meet this requirement, any <br />prospective underwriter will require the City to commit to providing the information needed <br />to comply under a continuing disclosure agreement. <br />Baker Tilly MA currently provides arbitrage and continuing disclosure services to the City <br />and will work with City staff to include the Bonds under the existing respective Agreement <br />for Municipal Advisor Services. <br />SUPPLEMENTAL <br />INFORMATION AND <br />BOND RECORD: <br /> <br />Supplementary information will be available to staff including detailed terms and <br />conditions of sale, comprehensive structuring schedules and information to assist in <br />meeting post-issuance compliance responsibilities. <br />Upon completion of the financing, a bond record will be provided that contains pertinent <br />documents and final debt service calculations for the transaction. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />Baker Tilly Municipal Advisors, LLC is a registered municipal advisor and wholly-owned subsidiary of Baker Tilly Virchow Krause, LLP, an accounting <br />firm. Baker Tilly Virchow Krause, LLP trading as Baker Tilly is a member of the global network of Baker Tilly International Ltd., the members of <br />which are separate and independent legal entities. © 2020 Baker Tilly Municipal Advisors, LLC.