Res. #07-045 - Accepting Proposal Sale of $2,600,000 G.O. Imp. Bonds

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Section 11. Assessments; Tax Levy. A. The Bonds are payable in part from the proceeds of special assessments (the "Assessments") levied or to be levied against properties benefited by the Project. The City hereby covenants and agrees that, for the payment of the cost of the Project, the City has done or will do and perform all acts and things necessary for the final and valid levy of special assessments in an amount not less than 20% of the costs of each of the improvements financed by the Bonds. It is estimated that collections of the Assessments will be as shown on Exhibit C attached hereto. In the event any such assessment shall at any time be held invalid with respect to any lot or tract of land, due to any error, defect or irregularity in any action or proceeding taken or to be taken by the City or by the City Councilor by any of the officers or employees of the City, either in the making of such assessment or in the performance of any condition precedent thereto, the City hereby covenants and agrees that it will forthwith do all such further things and take all such further proceedings as shall be required by law to make such assessment a valid and binding lien upon said property. Collections of special assessments shall be deposited in the Debt Service Account or Construction Account as directed by the City Council. Section 11. Security; Tax Levv. A. The Bonds are payable from the proceeds of special assessments (the "Assessments") levied or to be levied against properties benefited by the Project. The City hereby pledges to apply the proceeds of the Assessments to the payment of the Bonds. B. Tax Levy; Coverage Test; Cancellation of Certain Tax Levies. To provide moneys for payment of the principal of and interest on the Bonds there is hereby levied upon all of the taxable property in the City a direct annual ad valorem tax which shall be spread upon the tax rolls and collected with and as part of other general property taxes in the City for the years and in the amounts as follows: Year of Tax Levy Year of Tax Collection Amount See attached Exhibit C The tax levies are such that if collected in full they, together with special assessments and other revenues herein pledged for the payment of the Bonds, will produce at least five percent (5%) in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levies shall be irrepealable so long as any of the Bonds are outstanding and unpaid, provided, that the City reserves the right and power to reduce the levies in the manner and to the extent permitted by Minnesota Statutes, Section 475.61, Subdivision 3. Section 12. Defeasance. When all Bonds have been discharged as provided in this paragraph, all pledges, covenants and other rights granted by this Resolution to the registered holders of the Bonds shall, to the extent permitted by law, cease. The City may discharge its 18