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( 5 ) In conjunction with the issuance of the Refunding Bonds , <br /> and implementation of the refunding program by refunding outstanding <br /> �+ indebtedness , the Issuer was able to realize savings in debt service <br /> costs , and adobt a new and more flexible bond Ordinance which has <br /> substantially enhanced its ability to raise needed additional capital . <br /> ( 6 ) Section 103 ( c ) of the Internal Revenue Code of 1954 , as <br /> amended by Section 601 (a ) of the Tax Reform Act of 1969 ( the " Code" ) , <br /> and regulations of the United States Treasury Department applicable at <br /> the time the Refunding Bonds were issued , provided , in effect , that <br /> where an issue of governmental obligations is sold for the purpose of <br /> advance refunding a prior outstanding issue of governmental obligations , <br /> the yield " realized" by the issuer from the investment of a major portion <br /> of the proceeds of the Refunding Bonds may not exceed the yield on the <br /> Refunding Bonds themselves . <br /> In compliance with these provisions , and in order to assure the <br /> tax-exempt status of the interest to be paid on the Refunding Bonds , <br /> the Escrow Investments were purchased on terms such that the yield , <br /> computed on the "actuarial method" as required by applicable Federal <br /> law, on acquired obligations allocable to the proceeds of the <br /> Refunding Bonds , did not exceed the yield on the Refunding Bonds <br /> themselves . <br /> ( 7 ) Pursuant to Section 1 . 103- 13 (a ) ( 2 ) of the applicable <br /> Treasury Regulations , there was included in the transcript of <br /> proceedings with respect to the Refunding Bonds a Certification , <br /> executed on behalf of the Issuer, that it was not reasonably <br /> expected that the proceeds of the Refunding Bonds would be <br /> invested in a manner that would cause the Refunding Bonds to be <br /> characterized as "arbitrage bonds " under Section 103 (d ) of the <br /> Code - a characterization which would jeopardize the tax-exempt <br /> status of the interest to be paid on the Refunding Bonds . To <br /> further assure continued compliance with the applicable " arbitrage" <br /> provisions of the Code and Regulations , the Issuer covenanted in <br /> the Bond Ordinance that it would take no actions which , if such <br /> action had been reasonably anticipated at the time of the issuance <br /> of the Refunding Bonds , would have caused such bonds to be characterized <br /> as " arbitrage bonds . " <br /> 2 <br />