35-89 Anticipation Notes $500,000 Street Improvements

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Legal matters incident to the issuance of the Notes and with regard to the tax-exempt status of the interest thereon are subject to the approv- ing legal opinion of Calfee, Halter & Griswold, Bond Counsel, which will be furnished without cost to the original purchaser at the time the Notes are delivered to it. That opinion will include an opinion, based upon and assuming compliance with covenants and the accuracy of repre- sentations and certifications of the City, that under the existing law (a) the interest on the Notes (i) is excluded from gross income for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), (ii) is not treated as an item of tax preference for purposes of the alternative minimum tax imposed on individuals and corporations by the Code, and (iii) is exempt from the Ohio personal income tax and excluded from the net income base of the Ohio corporate franchise tax, and (b) the Notes are not "private activity bonds" as defined in the Code. Under the Code, the interest may be subject to alternative minimum, environmental, and branch profits taxes imposed on certain corporations, and to a tax imposed on excess net passive income of certain S corporations. For a more complete discussion of tax aspects, see the enclosed Preliminary Official Statement. 1. The 1989 Street Improvement Bond Anticipation Notes are issued in anticipation of the issuance of a like principal amount of general obligation bonds of the City under authority of the general laws of the State of Ohio and by virtue of certain ordinances and proceedings of the Council of the City with respect thereto for the purpose of paying the property owners' portion, in anticipation of the levy and collection of special assessments, and the City's portion of the cost of improving Cranford Avenue and certain other streets in the City of Lakewood, Ohio, by removal, where necessary, of the existing surface course, by grading and replacement, where necessary, of the base, and by resurfacing with asphaltic concrete, including the necessary appurtenances thereto. 2. The 1989 Water System Improvement Bond Anticipation Notes are issued in anticipation of the issuance of a like principal amount of general obligation bonds of the City under authority of the general laws of the State of Ohio and by virtue of certain ordinances and proceedings of the Council of the City with respect thereto for the purpose of replacing water mains, fire hydrants and curb connections in certain streets in the City of Lakewood, together with the necessary appurtenances thereto. The Notes, un~ess paid from other sources and subject to the provisions of federal bankruptcy law and other laws affecting creditors' rights, are to be paid from the proceeds of the levy of ad valorem taxes on all property subject to ad valorem taxes levied by the City, which taxes are within the ten-mill limitation imposed by law. The Notes will be prepared in typewritten or xerograpbically reproduced form at the expense of the City. If the original purchaser requests printed Notes, the original purchaser must pay the expense of printing. Delivery will be made without charge at such place in the State of Ohio as the original purchaser shall designate, provided that other mutual satisfactory arrangements for delivery outside the State of Ohio at the expense of the original purchaser may be made. It is anticipated that delivery will be made approximately on June 14, 1989. The original pur- chaser must pay for the Notes on the date of delivery in Federal Reserve Funds of the United States of America. -2-