I-1 - Finance Plan - 2025 GO Bond

Attachment 3 – Related Considerations No Bank Qualification We understand the City (in combination with any subordinate taxing jurisdictions or debt issued in the City’s name by 501(c)3 corporations) anticipates issuing more than $10,000,000 in tax- exempt debt during this calendar year. Therefore, the Bonds will be designated as “not bank qualified” obligations pursuant to Federal Tax Law. Arbitrage Compliance All tax-exempt bond issues are subject to federal rebate requirements which require all arbitrage earned in relation to the investment of bond proceeds to be rebated to the U.S. Treasury. A rebate exemption the City expects to qualify for is the “24-month spending” exemption. The City must also maintain a bona fide debt service fund for the Bonds or be subject to yield restriction in the debt service fund. A bona fide debt service fund involves an equal matching of revenues to debt service expense with a balance forward permitted equal to the greater of the investment earnings in the fund during that year or 1/12 of the debt service of that year. The City should become familiar with the various Arbitrage Compliance requirements for this bond issue. The Resolution for the Bonds prepared by Bond Counsel explains the requirements in greater detail. Continuing Disclosure Type: Full Dissemination Agent: Northland Securities The requirements for continuing disclosure are governed by SEC Rule 15c2-12. The primary requirements of Rule 15c2-12 actually fall on underwriters. The Rule sets forth due diligence needed prior to the underwriter’s purchase of municipal securities. Part of this requirement is obtaining commitment from the issuer to provide continuing disclosure. The City has more than $10,000,000 of outstanding debt and is required to undertake “full” continuing disclosure. Full disclosure requires annual posting of the audit and a separate continuing disclosure report, as well as the reporting of certain “material events.” Material events set forth in the Rule, including, but not limited to, bond rating changes, call notices, and issuance of “financial obligations” (such as SRF Loans, TIF Rebate Agreements, PFA loans, leases, or bank placements) must be reported within ten business days of occurrence. The report contains annual financial information and operating data that “mirrors” material information presented in the Official Statement. The specific contents of the annual report will be described in the Undertaking that appears in the appendix of the Official Statement. Northland currently serves as dissemination agent for the City, assisting with the annual reporting. The information for the Bonds will be incorporated into our reporting. Premiums In the current market environment, it is likely that the proposed pricing will include premiums. A premium price occurs when the underwriter pays the City an amount in excess of the par amount of a maturity in exchange for a higher coupon (interest rate). The use of premiums reflects the underwriter’s view on future market conditions, tax considerations for investors and other factors. Ultimately, the true interest cost calculation (“TIC”) will indicate the overall cost to the City, regardless of premium. Northland Securities, Inc. Page 6