01-26-15 Agenda, Packet and Committee Meeting Notice

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holder's basis for determining gain or loss on a sale, maturity or other disposition of a Discount Bond generally will be equal to the holder's cost, increased by the original issue discount that is accrued during the period that the Discount Bond is held by such holder. Generally, any gain or loss recognized by a holder on a sale, exchange or payment at maturity of a Discount Bond (based on the holder's basis) will be taxable as capital gain or loss (assuming the Discount Bond is held as a capital asset). A holder will recognize a taxable gain or loss on a Discount Bond called prior to maturity on the difference between the holder's basis and the call price of the Discount Bond. Owners of the Discount Bonds should consult their own tax advisors with respect to the computation for federal income tax purposes of the amounts of original issue discount which accrue during the period in which such Discount Bonds are held. Owners of the Discount Bonds should also consult their own tax advisors with respect to the state and local tax consequences arising from the original issue discount of the Discount Bonds. AMORTIZABLE BOND PREMIUM The initial offering price of the Bonds maturing on through and including (the "Premium Bonds ") is greater than the principal amount payable at maturity. As a result, the Premium Bonds will be considered to be issued with amortizable bond premium (the "Bond Premium "). An owner who acquires a Premium Bond in the initial offering will be required to adjust the owner's basis in the Premium Bond downward as a result of the amortization of the Bond Premium, pursuant to Section 1016(a)(5) of the Code. Such adjusted tax basis will be used to determine taxable gain or loss upon the disposition of the Premium Bonds (including sale, redemption or payment at maturity). The amount of amortizable Bond Premium will be computed on the basis of the taxpayer's yield to maturity, with compounding at the end of each accrual period. Rules for determining (i) the amount of amortizable Bond Premium and (ii) the amount amortizable in a particular year are set forth at Section 171(b) of the Code. No income tax deduction for the amount of amortizable Bond Premium will be allowed pursuant to Section 171(a)(2) of the Code, but amortization of Bond Premium may be taken into account as a reduction in the amount of tax - exempt income for purposes of determining other tax consequences of owning the Premium Bonds. Owners of Premium Bonds should consult their tax advisors with respect to the precise determination for federal income tax purposes of the treatment of Bond Premium upon the sale or other disposition of such Premium Bonds and with respect to the state and local tax consequences of owning and disposing of Premium Bonds. Special rules governing the treatment of Bond Premium, which are applicable to dealers in tax - exempt securities, are found at Section 75 of the Code. Dealers in tax - exempt securities are urged to consult their own tax advisors concerning the treatment of the Bond Premium. RATING Standard & Poor's ( "S &P ") has assigned an underlying rating of "_" to the Bonds. Such rating is not a recommendation to buy, sell or hold the Bonds. There is no assurance that such rating will remain in effect for any given period of time or that such rating will not be lowered or withdrawn entirely by S &P if, in their judgment, circumstances so warrant. Any such downward revision or withdrawal of the rating may have an adverse effect on the market price or marketability of the Bonds. CONTINUING DISCLOSURE UNDERTAKING AGREEMENT Pursuant to continuing disclosure requirements promulgated by the United States Securities and Exchange Commission in SEC Rule 15c2 -12, as amended (the "Rule "), the City will -7-