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used for no purpose other than the payment of the principal of and interest on the Bonds and on <br /> such other improvement bonds of the City as have been or may be directed to be paid therefrom. <br /> The City irrevocably appropriates to the Bond Fund (a) all amounts in excess of$2,025,400 <br /> received from the Purchaser, plus capitalized interest in the amount of$73,985, (b) the <br /> collections of special assessments and other funds to be credited and paid thereto in accordance <br /> with the provisions of Section 4.01, (c) any taxes levied in accordance with this resolution, and <br /> (d) all such other moneys as shall be received and appropriated to the Bond Fund from time to <br /> time. If the balance in the Bond Fund is at any time insufficient to pay all interest and principal <br /> then due on all bonds payable therefrom, the payment shall be made from any fund of the City <br /> which is available for that purpose, subject to reimbursement from the Bond Fund when the <br /> balance therein is sufficient, and the Council covenants and agrees that it will each year levy a <br /> sufficient amount to take care of any accumulated or anticipated deficiency, which levy is not <br /> subject to any constitutional or statutory tax limitation. <br /> There are hereby established two accounts in the Bond Fund, designated as the "Debt <br /> Service Account" and the "Surplus Account." All money appropriated or to be deposited in the <br /> Bond Fund shall be deposited as received into the Debt Service Account. On each February 1, <br /> the Finance Director shall determine the amount on hand in the Debt Service Account. If such <br /> amount is in excess of one-twelfth of the debt service payable from the Bond Fund in the <br /> immediately preceding 12 months, the Finance Director shall promptly transfer the amount in <br /> excess to the Surplus Account. The City appropriates to the Surplus Account any amounts to be <br /> transferred thereto from the Debt Service Account as herein provided and all income derived <br /> • from the investment of amounts on hand in the Surplus Account. If at any time the amount on <br /> hand in the Debt Service Account is insufficient to meet the requirements of the Bond Fund, the <br /> Finance Director shall transfer to the Debt Service Account amounts on hand in the Surplus <br /> Account to the extent necessary to cure such deficiency. <br /> 4.03. Additional Bonds. The City reserves the right to issue additional bonds payable <br /> from the Bond Fund as may be required to finance costs of the Improvements not financed <br /> hereby; provided that the City Council shall, prior to the delivery of such additional bonds, levy <br /> or agree to levy by resolution sufficient additional special assessments and ad valorem taxes, if <br /> any, which, together with other moneys or revenues pledged for the payment of said additional <br /> obligations, will produce revenues at least five percent(5%) in excess of the amount needed to <br /> pay when due the principal and interest on all bonds payable from the Bond Fund. The <br /> additional special assessments, ad valorem taxes and moneys or revenues so pledged, levied or <br /> agreed to be levied shall be irrevocably appropriated to the Bond Fund in the manner provided <br /> by Minnesota Statutes, Section 475.61. <br /> 4.04. Levy of Special Assessments. The City hereby covenants and agrees that for <br /> payment of the cost of each of the Improvements it will do and perform all acts and things <br /> necessary for the full and valid levy of special assessments against all assessable lots, tracts and <br /> parcels of land benefited thereby and located within the area proposed to be assessed therefor, <br /> based upon the benefits received by each such lot, tract or parcel, in an aggregate principal <br /> amount not less than twenty percent(20%) of the cost of the Improvements. In the event that <br /> any such assessment shall be at any time held invalid with respect to any lot, piece or parcel of <br /> land, due to any error, defect or irregularity in any action or proceeding taken or to be taken by <br /> -13- <br />