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• 6.03. Covenant. The City covenants and agrees with the holders from time to <br /> time of the Bonds that it will not take or permit to be taken by any of its officers, employees or <br /> agents any action which would cause the interest on the Bonds to become subject to taxation <br /> under the Internal Revenue Code of 1986, as amended (the"Code"), and Regulations <br /> promulgated thereunder(the "Regulations"), as such are enacted or promulgated and in effect on <br /> the date of issue of the Bonds, and covenants to take any and all actions within its powers to <br /> ensure that the interest on the Bonds will not become subject to taxation under such Code and <br /> Regulations. The Improvements are public improvements available for use by members of the <br /> general public on a substantially equal basis. The City will not enter into any lease, use <br /> agreement or other contract respecting the Improvements which would cause the Bonds to be <br /> considered"private activity bonds"or"private loan bonds"pursuant to Section 141 of the Code. <br /> For purposes of complying with the requirements of Section 148(f)(4)(C) of the <br /> Code relating to the exemption of certain small governmental units from the rebate requirements <br /> of the Code,the City represents that: <br /> (i) the City is a governmental unit with general taxing powers; <br /> (ii) the Bonds are not"private activity bonds" as defined in Section 141 of the <br /> Code (Private Activity Bonds); <br /> (iii) ninety-five percent of the net proceeds of the Bonds are to be used for the <br /> • local governmental purposes of the City; and <br /> (iv) the aggregate face amount of all tax-exempt bonds (other than Private <br /> Activity Bonds) issued by the City in calendar year in which the Bonds are <br /> to be issued is not reasonably expected to exceed $5,000,000. <br /> Therefore, pursuant to the provisions of Section 148(f)(4)(C) of the Code, the City shall not be <br /> required to comply with the arbitrage rebate requirements of paragraphs (2) and (3) of Section <br /> 148(f) of the Code. <br /> 6.04. Investment of Money on Deposit in the Bond Fund. The Finance Director <br /> shall ascertain monthly the amount on deposit in the Bond Fund. If the amount on deposit <br /> therein ever exceeds the aggregate amount of principal and interest due and payable from the <br /> Bond Fund through the next following February 1 plus a reasonable carryover as permitted by <br /> the Regulations, such excess shall be used to prepay and redeem Bonds or be invested at a yield <br /> less than or equal to the yield on the Bonds, based upon their amounts, maturities and interest <br /> rates on their date of issue, computed by the actuarial method. The City reserves the right to <br /> amend the provisions of this Section at any time, whether prior to or after the delivery of the <br /> Bonds, if and to the extent that this Council determines that the provisions of this Section are not <br /> necessary in order to ensure that the Bonds are not"arbitrage bonds"within the meaning of <br /> Section 148 of the Code and Regulations. <br /> • 6.05. Arbitrage Certification. The Mayor and the City Manager, being the <br /> officers of the City charged with the responsibility for issuing the Bonds pursuant to this <br /> -16- <br />