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• The sources and uses of funds to accomplish the Improvements are estimated by the City as follows: SOURCES:* Principal Amount of Bonds $25,900,000 Net Original Issue [Discount/Premium] Total Sources $ USES:* Costs of Improvements $ Debt Service Reserve Costs of Issuance and Underwriter's Discount Total Uses $ The payment of Underwriter's discount and the fee of Bond Counsel will be contingent on the Bonds being issued. See MISCELLANEOUS, Underwriting for a description of the Underwriter's discount. The City will deposit the net proceeds of the Bonds (principal amount [less/plus] net original issue [discount/premium], less Underwriter's discount, debt service reserve deposit and certain issuance costs) into a special fund established with the Trustee and designated "2012 Park and Recreational Improvement Construction Fund" (the "Construction Fund"). Moneys contained in the Construction Fund will be disbursed solely in payment of costs of the Improvements, paying necessary expenses incidental thereto and paying expenses of issuing the Bonds. Disbursements shall be on the basis of requisitions which shall contain at • least the following information: the person to whom payment is being made; the amount of the payment; and the purpose by general classification of the payment. For a description of how the Bond proceeds are to be invested pending use and the provisions governing those investments, see THE AUTHORIZING ORDINANCE, Investments. Security. The Bonds are not general obligations of the City but are special obligations, secured by a first and prior pledge of collections of the Taxes ("Tax receipts"). Tax receipts from the Bond Tax will be used to pay the scheduled principal of and interest on the Bonds, redeem Bonds prior to maturity, pay any arbitrage rebate due under Section 148(f) of the Code, maintain a debt service reserve at the required level and pay Trustee's fees and expenses and other administrative charges in connection with the Bonds (collectively, the "Bond Payments"). Tax receipts from the Permanent Tax will be used first, if necessary, to make the Bond Payments and second, for Permanent Tax Uses. The Bonds are secured under the Authorizing Ordinance. For a summary of the terms of the Authorizing Ordinance, see THE AUTHORIZING ORDINANCE. A debt service reserve will be maintained in the Bond Fund in an amount equal to one-half of the maximum annual principal and interest requirements on the Bonds. The debt service reserve will initially be funded with Bond proceeds. See THE AUTHORIZING ORDINANCE, The Bond Fund. • `Preliminary; subject to change. 7