8717-14 Adopting post-issuance compliance procedures

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ARBITRAGE COMPLIANCE CHECKLIST The City has certified and will certify that it will comply with the arbitrage rebate requirements of Section 148(f) of the Code. This checklist provides guidance for that compliance. Capitalized terms not defined in this checklist have the meanings given in Attachment A. 1. Note the Yield of the Obligations, as shown on the IRS Form 8038 -6. 2. Review the tax certificate to determine the Temporary Periods for the Obligations, during which periods various categories of Gross Proceeds may be invested in Higher Yielding Investments. 3. Do not invest Gross Proceeds in Higher Yielding Investments following the end of the applicable Temporary Period identified in Section 2 above unless yield reduction payments may be made (see tax certificate). 4. Monitor expenditures of Proceeds, including Investment Proceeds, against Issuance Date expectations for satisfaction of the applicable requirements for a Temporary Period from yield restriction on investment of Proceeds and to avoid "hedge bond" status. 5. Ensure that investments acquired with Gross Proceeds satisfy IRS regulatory safe harbors for establishing fair market value (e.g., through the use of bidding procedures) and maintain records to demonstrate satisfaction of those safe harbors. 6. Consult with Bond Counsel before engaging in credit entrancement or hedging transactions in respect of the Obligations, and before creating separate funds that are reasonably expected to be used to pay Debt Service on the Obligations. All records relating to any Hedge or other derivative financial instrument associated with the Obligations shall be maintained. Such records include, but are not limited to the ISDA Master Agreement, all schedules and annexes to the Master Agreement, the initial confirmation(s) and any subsequent amendments, confirmations or novations. Records shall also include the periodic mark to market valuations and the cash flows applicable to a particular derivative financial instrument. 7. Maintain copies of all contracts and certificates relating to credit enhancement and hedging transactions relating to the Obligations. 8. Even after all Proceeds of the Obligations have been spent, ensure that the Bond Fund meets the requirements of a Bona Fide Debt Service Fund, i.e., a fund used primarily to achieve a proper matching of revenues with Debt Service that is depleted at least once each Bond Year, except for a reasonable carryover amount not to exceed the greater of: (i) the earnings on the fund for the immediately preceding Bond Year; or (ii) one - twelfth of the Debt Service on the Obligations for the immediately preceding Bond Year. To the extent that the Bond Fluid qualifies as a Bona Fide Debt Service Fund for a giver? Bond Pear, the amounts held in thatfand are not subject to yield restriction for that year.