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• POST ISSUANCE COMPLIANCE: SCHEDULES ATTACHED: SALE TERMS AND MARKETING: RISKSISPECIAL CONSIDERATIONS: SUPPLEMENTAL INFORMATION AND BOND RECORD: Span The issuance of the Bonds will result in post- issuance compliance responsibilities. The responsibilities lie in two primary areas: i) compliance with federal arbitrage requirements and ii) compliance with secondary disclosure requirements. Federal arbitrage requirements include a wide range of implications that have been taken into account as your issue has been structured. Post - issuance compliance responsibilities for your tax - exempt issue include both rebate and yield restriction provisions of the IRS Code. In general terms the arbitrage requirements control the earnings on unexpended bond proceeds, including investment earnings, moneys held for debt service payments (which are considered to be proceeds under the IRS regulations), and /or reserves. There is an exception to rebate for a municipality that issues $5 million or less of tax - exempt obligations in a calendar year. The City expects to qualify as a small issuer for 2012; therefore, the Bonds will be exempt from rebate. Yield restriction provisions will apply to the debt service fund and any project proceeds unspent after three years under certain conditions and the funds should be monitored throughout the life of the Bonds. Secondary disclosure requirements result from an SEC requirement that underwriters provide ongoing disclosure information to investors. To meet this requirement, any prospective underwriter will require the City to commit to providing the information needed to comply under a continuing disclosure agreement. Springsted currently provides arbitrage and continuing disclosure compliance services to the City under separate contracts. Contract amendments adding the Bonds will be provided to the City. Schedules attached include a project summary, debt service schedules for the Bonds as a whole and by purpose, and a debt service comparison for the Refunding Portion. Variability of Issue Size: A specific provision in the sale terms permits modifications to the issue size and /or maturity structure to customize the issue once the price and interest rates are set on the day of sale. Prepayment Provisions: Bonds maturing on or after February 1, 2022 may be prepaid at a price of par plus accrued interest on or after February 1, 2021. Bank Qualification: The City does not expect to issue more than $10 million in tax - exempt obligations that counts against the $10 million limit for this calendar year; therefore, the Bonds are designated as bank qualified. The outcome of this financing will rely on the market conditions at the time of the sale. Any projections included herein are estimates based on current market conditions. Supplementary information will be available to staff including detailed terms and conditions of sale, comprehensive structuring schedules and information to assist in meeting post - issuance compliance responsibilities. Upon completion of the financing, a bond record will be provided that contains pertinent documents and final debt service calculations for the transaction. sted Page 2