RES 16-042 RELATING TO $1,445,000 GENERAL OBLIGATION TAX ABATEMENT BONDS, SERIES 2016B; AWARDING THE SALE, FIXING THE FORM AND DETAILS AND PROVIDING FOR THE EXECUTION AND DELIVERY THEREOF AND SECURITY THEREFOR

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shall continue to maintain the Construction Fund until payment of all costs and expenses incurred in connection with the Project financed by the Bonds have been paid. To the Construction Fund there shall be credited from the proceeds of the Bonds an amount equal to the estimated cost of the Project and from the Construction Fund there shall be paid all construction costs and expenses. After payment of all construction costs, the Construction Fund shall be discontinued and any Bond proceeds remaining therein shall be credited to the Sinking Fund established by Section 4.02 hereof. 4.02. General Obligation Tax Abatement Bonds, Series 2016B Sinking Fund. The Bonds shall be payable from a separate General Obligation Tax Abatement Bonds, Series 2016B Sinking Fund (the "Sinking Fund ") which shall be created and maintained on the books of the City as a separate debt redemption fund until the Bonds, and all interest thereon, are fully paid. There shall be credited to the Sinking Fund the following: (a) Any amount deposited therein pursuant to Section 4.01 hereof. (b) All Tax abatement Revenue received by the City. (c) All taxes levied and all other money which may at any time be received for or appropriated to the payment of the principal of or interest on the Bonds, including all collections of any ad valorem taxes levied for the payment of the Bonds. (d) Any other funds appropriated by the Council for the payment of the Bonds. There are hereby established two accounts in the Sinking Fund, designated as the "Debt Service Account" and the "Surplus Account." All money appropriated or to be deposited in the Sinking Fund shall be deposited as received into the Debt Service Account. On each February 1, the City Finance Director shall determine the amount on hand in the Debt Service Account. If such amount is in excess of one - twelfth of the debt service payable from the Sinking Fund in the immediately preceding 12 months, the City Finance Director shall promptly transfer the amount in excess to the Surplus Account. The City appropriates to the Surplus Account any amounts to be transferred thereto from the Debt Service Account as herein provided and all income derived from the investment of amounts on hand in the Surplus Account. If at any time the amount on hand in the Debt Service Account is insufficient to meet the requirements of the Sinking Fund, the City Finance Director -shall transfer to the Debt Service Account amounts on hand in the Surplus Account to the extent necessary to cure such deficiency. 4.03. Full Faith and Credit Pledged. The full faith and credit and taxing power of the City shall be and are hereby irrevocably pledged for the prompt and full payment of the principal of and interest on the Bonds. In order to produce aggregate amounts which, together with the Tax Abatement Revenues, will produce amounts not less than 5% in excess of the amounts needed to meet when due the principal and interest payments on the Bonds, ad valorem taxes are hereby levied on all taxable property in the City. The taxes will be levied and collected in years and amounts shown on the attached levy computation. Said taxes shall be irrepealable as long as any of the Bonds are outstanding and unpaid, provided that the City reserves the right and power to reduce said levies in accordance with the provisions of Minnesota Statutes, Section 475.61