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to pay the principal of and interest on the Bonds when due, and the Finance Director will report any current or anticipated deficiency in the Debt Service Fund to the City Council. 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 City Finance Director is directed to pay such principal or interest from other funds of the City, and such fund will be reimbursed for those advances out of the proceeds of taxes when collected. 4.02 Sewer Fund. The City has created and will continue to operate its Sewer Fund to which will be credited all gross revenues of the sewer plant and system (the "Sewer System") and out of which will be paid all normal and reasonable expenses of current operations of the sewer plant and system. Any balance therein is deemed "net revenues" and will be transferred, from time to time after the Redemption Date, to the Debt Service Account, in an amount sufficient to pay principal of and interest on the Bonds and any other bonds similarly authorized. 4.03. Findings. It is hereby found and determined that based upon information presently available from the City's municipal advisors, the issuance of the Bonds will result in a reduction of debt service cost to the City on the Refunded Bonds, such that the present value of such debt service or interest cost savings (the "Reduction") is at least 3.00% of the debt service on the Refunded Bonds. The Reduction, after the inclusion of all authorized expenses of refunding in the computation of the effective interest rate on the Bonds, is adequate to authorize the issuance of the Bonds as provided by Minnesota Statutes, Section 475.67, Subdivisions 12 and 13. 4.04. General Obligation Pledge. For the prompt and full payment of the principal and interest on the Bonds, as the same respectively become due, the full faith, credit and taxing powers of the City will be and are hereby irrevocably pledged. If the balance in the Escrow Account or Debt Service Account is ever insufficient to pay all principal and interest then due on the Bonds and any other bonds payable therefrom, the deficiency will be promptly paid out of monies in the general fund of the City which are available for such purpose, and such general fund may be reimbursed with or without interest from the Escrow Account or Debt Service Account when a sufficient balance is available therein. To the extent that it shall ever by necessary to provide full and timely payment of the debt service on the Bonds, the City shall, pursuant to the authority described in this paragraph, levy an ad valorem tax on all taxable property within the City sufficient for such purposes. 4.05. Pledge of Tax Levy. It is determined that estimated collection of net revenues of the sewer system for the payment of principal and interest on the Bonds after the Redemption Date will produce at least 5% in excess of the amount needed to meet when due, the principal and interest payments on the Bonds maturing after the Redemption Date, and that no tax levy is needed at this time. 4.06. Filing. 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 Section 475.63 of the Act and the tax levy required by law has been made. 4.07 Prior Resolution Pledu es. The pledges and covenants of the City made by the Prior Resolution relating to the ownership, protection of and other particulars governing the operation and EL185-67-688304.v2