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Arbitrage Monitoring: <br />Because the Bonds are tax-exempt obligations/tax credit obligations, the City <br />must. ensure Compliance with .certain Internal Revenue Service (IRS) rules <br />throughout the life of the issue. These rules apply .to all gross .proeeeds ofthe <br />issue, including initial bond.proceeds and investment earnings .in construction, <br />escrow, debt. service, and any reserve funds. How issuers spend bond proceeds <br />and how they track interest earnings on funds: (arbitrage/yield restriction <br />compliance }.are common subjects ofIRS inquiries. Your specific responsibilities <br />will be detailed in the Tax Certificate prepared by your Bond Attorney and <br />provided at closing. <br />We recommend that you. regularly monitor compliance with these rules andlor <br />retain the.services of a .qualified firm to assist you. <br />Risk Factors: <br />GO Pledge; Because the Bonds will. be general obligations of the City for which <br />its .full faith, credit and.taxing powers are pledged; if the..:annual revenues:.collected <br />are not sufficient to pay the debt service payments, other City funds will need to <br />be used. <br />Other Service Providers: <br />This debt issuance will require the engagement of other public finance service <br />identifies those other service providers, so. Ehlers, can <br />Providers. This :section. <br />coordinate their engagement on your behalf Where you have previously used a <br />particular firm to provide a service, we have assumed that you will continue that <br />relationship. For services you have not previously required, we have identified a <br />service provider. Fees charged by these: service providers will be paid from <br />proceeds of the obligation.,. unless you notify us that you wish to pay them from <br />other sources.. our pre-rsale bond sizing includes a good faith estimate of these <br />fees, so their final Fees. may vary. If YOU have any questions pertaining. to the. <br />identified service: providers or their role, or if you would like to: use a different. <br />service provider for any of the listed services please contact us. <br />Bond Attorney: Kennedy. & Graven <br />Paying Agent: Bond Trust Services <br />Rating Agency: This issue will not berated. <br />investment Earnings: <br />To more efficiently segregate funds 'for this project and maximize interest earnings <br />we recommend using either your ,local :banks or Ehlers Investment Partners, a <br />subsidiary of Eiders; to assist with. the investment of bond proceeds until they are <br />needed to pay project costs. <br />.Summary: <br />to l_ie.made by the Council are as. followscept <br />7The.decision§ <br />ormodify the finance assumptions described in this report.dopt <br />the resolution, attached to this report. <br />Presale Report June 20; 2017 City of Gem Lake, Minnesota Page <br />3 <br />