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City of St. Anthony, Minnesota <br /> February 22, 2001 <br /> (c) Bona Fide Debt Service Fund The City must maintain a bona fide debt <br /> service fund for the Bonds or be subject to <br /> yield restriction. This requires restricting the <br /> investments held in the debt service fund to <br /> the yield on the Bonds and/or paying back <br /> excess investment earnings in the debt <br /> service fund to the federal government. A <br /> bona fide debt service fund is a fund for which <br /> there is an equal matching of revenue to debt <br /> service expense, with carry over permitted <br /> equal to the greater of the investment <br /> earnings in the fund during that year or 1/12 <br /> the debt service of that year. <br /> (d) Economic Life The average life of the Bonds cannot exceed <br /> 120% of the economic life of the projects to be <br /> financed. The economic life of the <br /> improvements exceeds 20 years. The <br /> average life of the Bonds is 9.208 years, <br /> therefore the issue is within the economic life <br /> requirements. <br /> (e) Federal Reimbursement Federal reimbursement regulations require the <br /> Regulations City to make a declaration, within 60 days of <br /> the actual payment, of its intent to reimburse <br /> itself from expenses paid prior to the receipt of <br /> Bond proceeds. It is our understanding the <br /> City has taken whatever actions are <br /> necessary to comply with the federal <br /> reimbursement regulations in regards to the <br /> Bonds. Non-Bond funds can be used to repay <br /> expenditures made prior to receipt of Bond <br /> proceeds. <br /> 11. Continuing Disclosure The Bonds are subject to continuing <br /> disclosure requirements set forth by the <br /> Securities and Exchange Commission. The <br /> SEC rules require the City to undertake an <br /> annual update of certain Official Statement <br /> information and report any material events to <br /> the national repositories. Springsted currently <br /> provides continuing disclosure services for the <br /> City under a separate contract. An <br /> amendment to that contract adding this issue <br /> has been provided to City staff. <br /> 12. Attachments • Sources and Uses of Funds (project <br /> listing) <br /> • Assessment Income Schedules <br /> • Debt Service Schedule <br /> • Terms of Proposal <br /> i <br /> Page 3 <br />