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• that the proceeds of the Bonds will not be used in a manner that would cause the <br /> Bonds to be arbitrage bonds within the meaning of the Code and Regulations. <br /> 8.05. Exemption from Rebate Requirement. For purposes of complying <br /> with the requirements of Section 148(f)(4)(C) of the Code relating to the exemption <br /> of certain small governmental units from the rebate requirements of the Code, the <br /> 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 <br /> 141 of the Code (Private Activity Bonds); <br /> (iii) ninety-five percent of the net proceeds of the Bonds are to be <br /> used for the local governmental purposes of the City; and <br /> (iv) the aggregate face amount of all tax-exempt bonds (other than <br /> Private Activity Bonds) issued by the City in calendar year 1997 is <br /> 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 <br /> shall not be required to comply with the arbitrage rebate requirements of paragraphs <br /> • (2) and (3) of Section 148(f) of the Code. <br /> 8.06. Investment of Money on Deposit in the Revenue Bond Account. <br /> The Finance Director shall ascertain monthly the amount on deposit in the <br /> Revenue Bond Account. If the amount on deposit therein ever exceeds the <br /> aggregate amount of principal and interest due and payable from the Revenue Bond <br /> Account through the next following January 1 plus a reasonable carryover as <br /> permitted by the Regulations, such excess shall be used to prepay and redeem Bonds <br /> or be invested at a yield less than or equal to the yield on the Bonds, based upon <br /> their amounts, maturities and interest rates on their date of issue, computed by the <br /> actuarial method. The City reserves the right to amend the provisions of this <br /> Section at any time, whether prior to or after the delivery of the Bonds, if and to the <br /> 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 <br /> meaning of Section 148 of the Code and Regulations. <br /> 8.07. Interest Disallowance. The City hereby designates the Bonds as <br /> "qualified tax-exempt obligations" for purpose of Section 265(b) of the Code relating <br /> to the disallowance of interest expenses for financial institutions. The City <br /> represents that in calendar year 1997 it does not reasonably expect to issue <br /> tax-exempt obligations which are not private activity bonds (not treating qualified <br /> • -22- <br />