34-08 Issuance & Sale of Notes Sidewalks $201,000

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and are appropriated for that purpose, the amount of the tax levy in each year must be reduced by the amount available and appropriated: (1) The special assessments levied for the costs of the Project. (2) Any surplus in the Bond Retirement Fund. (3) Proceeds received from the sale ofthe Bonds or any notes issued to refund or renew the Notes. (4) Any other money lawfully available to the City. Section 11. Federal Tax Matters. The City covenants that it will take those actions required to maintain the Federal Tax Status on the Notes and that it will not take or permit to be taken any actions that would adversely affect that Federal Tax Status. Without limiting these covenants, the City specifically covenants as follows: (a) Private Activity Bonds. The City will apply the proceeds received from the sale of the Notes to pay costs of the Project, to retire the Outstanding Notes, and to pay the Financing Costs in connection with the Notes. The City will not permit the use of the Project by any person, will not secure or derive the money for payment of Debt Service on the Notes by any property or payments, and will not loan the proceeds of the Notes to any person, all in a manner as to cause the Notes to be "private activity bonds" within the meaning of Code Section l4l(a). (b) Arbitrage. The City will restrict the use of proceeds of the Notes in the manner and to the extent as may be necessary, after taking into account reasonable expectations at the time of the delivery of and payment for the Notes, so that the Notes will not constitute "arbitrage bonds" within the meaning of Code Section 148. The Director of Finance or any other official having responsibility for issuing the Notes, is authorized and directed, alone or in conjunction with any other officer, employee, or consultant of the City, to sign and deliver a certificate of the City, for inclusion in the transcript of proceedings for the Notes, setting forth the reasonable expectations of the City on the Closing Date, regarding the amount and use of the proceeds of the Notes in accordance with Code Section 148. If required, the City will limit the yield on any "investment property" (as defined in Code Section l48(b)(2)) acquired with the proceeds of the Notes. (c) Arbitrage Rebate. Unless the gross proceeds of the Notes are expended in accordance with one of the spending period exceptions set forth in Treas. Reg. §1.148-7, the City will pay the amounts required by Code Section l48(f)(2) to the United States at the times required by Code Section l48(f)(3). The City will maintain the books and records and make the calculations and reports that are required to comply with the Code's arbitrage rebate requirements. 7