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Section 11. Federal Tax Considerations. The City covenants that it will use, and will
<br />restrict the use and investment of, the proceeds of the Bonds in such manner and to such extent as
<br />may be necessary so that (a) the Bonds will not (i) constitute private activity bonds, arbitrage bonds or
<br />hedge bonds under Sections 141, 148 or 149 of the Code or (ii) be treated other than as bonds to
<br />which Section 103 of the Code applies, and (b) the interest thereon will not be an item of tax
<br />preference under Section 57 of the Code.
<br />The City further covenants that (a) it will take or cause to be taken such actions that
<br />may be required of it for the interest on the Bonds to be and to remain excluded from gross income for
<br />federal income tax purposes, and (b) it will not take or authorize to be taken any actions that would
<br />adversely affect that exclusion, and (c) it, or persons acting for it, will, among other acts of
<br />compliance, (i) apply the proceeds of the Bonds to the governmental purpose of the borrowing, (ii)
<br />restrict the yield on investment property acquired with those proceeds, (iii) make timely and adequate
<br />payments to the federal government, (iv) maintain books and records and make calculations and
<br />reports, and (v) refrain from certain uses of those proceeds, and, as applicable, of property financed
<br />with such proceeds, all in such manner and to the extent necessary to assure such exclusion of that
<br />interest under the Code.
<br />The Director of Finance, as the fiscal officer, or any other officer of the City having
<br />responsibility for issuance of the Bonds is hereby authorized (a) to make or effect any election,
<br />selection, designation, choice, consent, approval, or waiver on behalf of the City with respect to the
<br />Bonds as the City is permitted or required to make or give under the federal income taY laws,
<br />including, without limitation, any of the elections available under Section 148 of the Code, for the
<br />purpose of assuring, enhancing ar protecting favorable tax treatment or status of the Bonds or interest
<br />thereon or assisting compliance with requirements for that purpose, reducing the burden or expense
<br />of such compliance, reducing the rebate amount or payments or penalties, or making payments of
<br />special amounts in lieu of making computations to determine, or paying, excess earnings as rebate, or
<br />obviating those amounts or payments, as determined by that officer, which action shall be in writing
<br />and signed by the officer, (b) to take any and all other actions, make or obtain calculations, make
<br />payments, and make or give reports, covenants and certifications of and on behalf of the City, as may
<br />be appropriate to assure the exclusion of interest from gross income and the intended tax status of the
<br />Bonds, and (c) to give one or more appropriate certificates of the City, for inclusion in the transcript
<br />of proceedings for the Bonds, setting forth the reasonable expectations of the City regarding the
<br />amount and use of all the proceeds of the Bonds, the facts, circumstances and estimates on which they
<br />are based, and other facts and circumstances relevant to the tax treatment or status of the Bonds and
<br />interest thereon.
<br />Each covenant made in this Section with respect to the Bonds is also made with
<br />respect to all issues any portion of the debt service on which is paid from proceeds of the Bonds (and,
<br />if different, the original issue and any refunding issues in a series of refundings), to the extent such
<br />compliance is necessary to assure exclusion of interest on the Bonds from gross income for federal
<br />income tax purposes, and the officers identified above are autharized to take actions with respect to
<br />those issues as they are authorized in this Section to take with respect to the Bonds.
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