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U the Debt Service Fund hereby created, there is hereby pledged and irrevocably appropriated and there will be credited: (i) the proceeds of the ad valorem taxes hereinafter levied (the "Taxes") for the Improvements described in Section 1.01, (ii) capitalized interest financed from Bond proceeds, if any; (iii) any amount over the minimum purchase price of the Bonds paid by the Purchaser, to the extent designated for deposit in the Debt Service Fund in accordance with Section 1.03; (iv) all investment earnings on amounts in the Debt Service Fund; and (v) any other funds appropriated for the payment of principal or interest on the Bonds. If a payment of principal or interest on the Bonds becomes due when there is not sufficient money in the Debt Service Fund to pay the same, the Finance Director is directed to pay such principal or interest from the general fund or other funds of the City, and such fund will be reimbursed for those advances out of the proceeds of Taxes when collected. 3.02. Construction Fund. The proceeds of the Bonds, less the appropriations made in Section 3.01, together with any other funds appropriated for the Improvements and Taxes collected during the construction of the Improvements, will be deposited in a separate construction fund (the "Construction Fund") to be used solely to defray expenses of the Improvements and the payment of principal and interest on the Bonds prior to the completion and payment of all costs of the Improvements. Any balance remaining in the Construction Fund after the Improvements are completed and the costs thereof have been paid may be used as provided in Minnesota Statutes, section 475.65, under the direction of the City Council. Thereafter, the Construction Fund is to be closed and any balance remaining therein and subsequent collections of Taxes for the Improvements are to be deposited in the Debt Service Fund. 3.03. Pledge of Tax Levy. For the purpose of paying the principal of and interest on the Bonds, there is levied a direct annual irrepealable ad valorem tax upon all of the taxable property in the City, which will be spread upon the tax rolls and collected with and as part of other general taxes of the City. The taxes will be credited to the Debt Service Fund above provided and will be in the years (being each year of collection) and amounts as set forth in Exhibit C. 3.04. Certification to County Auditor as to Debt Service Fund Amount. It is hereby determined that the estimated collection of the foregoing Taxes will produce at least 5% in excess of the amount needed to meet when due the principal and interest payments on the Bonds. The tax levy herein provided is irrepealable until all of the Bonds are paid, provided that at the time the City makes its annual tax levies the City Finance Director may certify to the County Auditor/Treasurer of Sherburne County the amount available in the Debt Service Fund to pay principal and interest due during the ensuing year, and the County Auditor/Treasurer will thereupon reduce the levy collectible during such year by the amount so certified in the manner and to the extent permitted by Section 475.61, subdivision 3 of the Act. 3.05. Countv Auditor/Treasurer's Certificate as to Registration. The City Clerk is authorized and directed to file a certified copy of this resolution with the County Auditor/Treasurer of Sherburne County and to obtain the certificate required by Minnesota Statutes, Section 475.63. EL185-64-684074.d2 7