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D. When the amount in the special reserve fund equals or <br />exceeds the amount required to retire the remaining unmatured bonds <br />(whether by advance retirement or otherwise), the amount of the <br />special reserve fund shall be transferred to the redemption fund, <br />and the remaining installments of principal and interest not yet <br />due from assessed property owners shall be cancelled without <br />payment. <br /> <br /> Section 5.4. INVESTMENT EARNINGS FUND. Proceeds of the <br />investment of amounts in the refunding fund (except proceeds to be <br />used for retirement of the refunded bonds), and the special reserve <br />fund will be deposited in the investment earnings fund. On July 1 <br />of each year during the term of the bonds (or at other times as may <br />be required or permitted by regulations of the United States <br />Internal Revenue Service), the Director of Finance shall determine <br />whether any portion of investment earnings must be rebated to the <br />United States pursuant to Section 148 of the United States Internal <br />Revenue Code and regulations adopted thereunder. Any amounts <br />required to be rebated will be transferred to the arbitrage rebate <br />fund, and the balance will be transferred as follows: <br /> <br /> (a) To the extent that the balance in the special <br />reserve fund is less than the Reserve Requirement, a transfer will <br />be made from the investment earnings fund to the special reserve <br />fund. <br /> <br /> (b) The remaining balance in the investment earnings <br />fund, if any, will be transferred to the redemption fund to be <br />used, in the discretion of the Director of Finance, as a credit <br /> <br />5 <br /> <br /> <br />