RES 18-036 RESOLUTION RELATING TO $2,610,000 GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2018A; AWARDING THE SALE

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6.04. Arbitrage Rebate. (a) It is hereby found that the City has general taxing powers, that no Bond is a "private activity bond" within the meaning of Section 141 of the Code, that 95% or more of the net proceeds of the Bonds are to be used for local governmental activities of the City, and that the aggregate face amount of all tax- exempt obligations (other than private activity bonds) issued by the City and all subordinate entities thereof during the year 2018 is not reasonably expected to exceed $5,000,000. Therefore, pursuant to the provisions of Section 148(f)(4)(D) of the Code, the City shall not be required to comply with the arbitrage rebate requirements of paragraphs (2) and (3) of Section 148(f) of the Code. (b) Notwithstanding the provisions of paragraph (a) of this Section 6.04, if the arbitrage rebate provisions of Section 148(f) of the Code apply to the Bonds, the City hereby covenants and agrees to make the determinations, retain records and rebate to the United States the amounts at the times and in the manner required by said Section 148(f) and applicable Regulations. 6.05. Investment of Money on Deposit in the Bond Fund. The Finance Director shall ascertain monthly the amount on deposit in the Bond Fund. If the amount on deposit therein ever exceeds the aggregate amount of principal and interest due and payable from the Bond Fund through the next following February 1 plus a reasonable carryover as permitted by the Regulations, such excess shall be used to prepay and redeem Bonds or be invested at a yield less than or equal to the yield on the Bonds, based upon their amounts, maturities and interest rates on their date of issue, computed by the actuarial method. The City reserves the right to amend the provisions of this Section at any time, whether prior to or after the delivery of the Bonds, if and to the extent that this Council determines that the provisions of this Section are not necessary in order to ensure that the Bonds are not "arbitrage bonds" within the meaning of Section 148 of the Code and Regulations. 6.06. Arbitrage Certification. The Mayor and the City Manager, being the officers of the City charged with the responsibility for issuing the Bonds pursuant to this resolution, are authorized and directed to execute and deliver to the Purchaser a certification in accordance with the provisions of Section 148 of the Code, and the Regulations, stating the facts, estimates and circumstances in existence on the date of issue and delivery of the Bonds which make it reasonable to expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be arbitrage bonds within the meaning of the Code and Regulations. 6.07. Oualified Tax - Exempt Obligations. The City hereby designates the Bonds as "qualified tax —exempt obligations" for purposes of Section 265(b) of the Code relating to the disallowance of interest expenses for financial institutions. The City represents that in calendar year 2018 it does not reasonably expect to issue tax — exempt obligations which are not private activity bonds (not treating qualified 501(c)(3) bonds under Section 145 of the Code as private activity bonds for purposes of this representation) in an amount in excess of $10,000,000. 6.08. Official Statement. The Official Statement relating to the Bonds, dated April 25, 2018, prepared and distributed on behalf of the City by Ehlers & Associates, hic., is hereby approved. Ehlers & Associates, Inc., is hereby authorized on behalf of the City to prepare and distribute to the Purchaser a supplement to the Official Statement listing the offering price, the interest rates, other information relating to the Bonds required to be included in the Official Statement by Rule 15c2 -12 adopted by the Securities and Exchange Commission under the 11 4852- 7706 -1987\2